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There is reason to appreciate North Carolina reclaiming the #1 spot in CNBC’s “Top States for Business” rankings yesterday. In a time where “industrial policy” shapes economic growth and state and local levels (like it or not), the Tar Heel State has done a very good job developing strong locations for emerging and growing industries.
From its development of Research Triangle Park more than 60 years ago, to efforts in the last 15 years or so to improve economic recruitment and reduce State Income Tax rates, North Carolina as a whole continues to move in the right direction with respect to productivity. Even in the first quarter of this year, while US GDP took a -0.5% hit, the State’s economy continued to grow.
At the same time, North Carolina’s continued boom has mostly focused on major metropolitan areas (Triangle, Charlotte, Triad, Asheville, and Wilmington). Rural areas and those whose legacy is tied to traditional manufacturing (and agriculture) haven’t been able to keep up as a result of their exposure to losses resulting in large part to the influences of globalization.
A new reporting initiative from the Bureau of Economic Analysis may help us understand this further. Released yesterday, the BEA’s “Distribution of Personal Income” report has been revised to include evaluation of disposable income (i.e., income after taxes). Currently limited to State-level analysis, I do hope we will see this effort expanded to deeper information at the County level.
When we look at the current political upheaval, one can objectively say that localized economic disparities (often noted in North Carolina to the “urban-rural divide”) did play a role in the November 2024 election results, and in turn, subsequent changes in public policy. While North Carolina has seen significant growth at the State level, the lack of its visible presence on a wide level (especially outside major metropolitan areas) is an issue of concern.
I will take a deeper look at the new BEA report over the weekend, and I hope to share more thoughts on this issue by Sunday. Have a good weekend.
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