There’s a general perception that two of North Carolina’s traditional industries, agriculture and manufacturing, contribute much less to today’s economy than in previous decades. But, as NC State University economist Mike Walden explains, “It’s always the case of how you measure these things.”
“And let’s look at two alternative measures: Let’s look at the percentage of total income contributed by these two sectors to the state economy, and then let’s also look at quantity of production — in other words, the amount of production coming out of those sectors.
“If you look at farming and manufacturing as a percent of the total income-generating economy, they have gone down. In the last 25 years for farming, it’s gone from 1.6 percent of total income to 1 percent today. For manufacturing, it has gone from 29 percent of total income in the state 25 years ago to 21 percent today.
“So if you stopped there, you’d say, ‘Yes, these industries are declining.’ But if you look at the quantity — the quantity of farm output, the quantity of manufacturing output — produced in these sectors, you get a different story. Farm output in the last 25 years in North Carolina is up 325 percent. Manufacturing output is up 154 percent.
“Now why the difference between these two numbers? Two things. One, prices: We’ve tended to see prices for farming output and manufacturing output go down faster than for other sectors. And secondly, the service sector has grown enormously as people have gotten higher income and they have chosen to spend it on services.
“So again this is where you have to be careful and know what you are looking at, knowing how to measure the sectors. But in terms of what they produce, farming and manufacturing have never been bigger in North Carolina.”