Economic Outlook For Durham by Dr. Walden, NCSU
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Report on economic outlook in Durham
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Economic Outlook For Durham by Dr. Walden, NCSU
- 1. ECONOMIC OUTLOOK FOR DURHAM Dr. Michael L. Walden 1
- 2. DURHAM ECONOMY HAS ENJOYED BOTH GROWTH AND STABILITY Gains Since End of the Recession Durham US Jobs 14% 12% GDP 1% * 10% * but Durham regional GDP declined very little during the recession 2
- 3. BUT, IMPROVEMENT IN DURHAM CO.’S PER CAPITA INCOME RELATIVE TO THE NATION HAS STALLED 3 0.8 0.85 0.9 0.95 1 1.05 1.1 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
- 4. WHY THE RETREAT IN RELATIVE PER CAPITA INCOME IN DURHAM SINCE THE EARLY 1990’s? WHILE DURHAM HAS ADDED HIGH-PAYING JOBS IN FINANCE, TECH, AND PROFESSIONAL SERVICES 2x FASTER THAN THE NATION SINCE 1992, DURHAM HAS LOST MANUFACTURING JOBS AT A FASTER RATE THAN THE NATION, AND DURHAM HAS ADDED JOBS IN THE LOWER-PAYING PERSONAL SERVICE SECTOR AT 3x THE NATIONAL RATE 4
- 5. IMPACTS AND ISSUES WITH THE LIKELY TRUMP ADMINISTRATION POLICIES GOAL TO DOUBLE ANNUAL GROWTH RATE: 2% TO 4% POLICIES PROPOSED TO ACCOMPLISH: * TAX REDUCTIONS * INFRASTRUCTURE PROJECTS * INCREASED MILITARY SPENDING * REDUCED REGULATIONS * INCREASED ENERGY PRODUCTION * REDUCED TRADE DEFICIT 5
- 6. QUESTIONS WILL TAX CUTS INCREASE BORROWING? INFRASTRUCTURE: WHAT, HOW FAST, HOW FUND? MILITARY: PERSONNEL OR EQUIPMENT? COSTS AND BENEFITS OF REGULATIONS ENERGY: OFF-SHORE NORTH CAROLINA? 6
- 7. REDUCE TRADE DEFICIT AND SHIFT PRODUCTION TO THE U.S. RENEGOTIATE TREATIES, LAWSUITS, TARIFFS WORRY OF A “TRADE WAR” COMPLICATIONS WITH SUPPLY CHAINS AT RISK: $28 BILLION OF EXPORTS FROM THE TRIANGLE REGION 7
- 8. OTHER NATIONAL ISSUES IMPACTING THE ECONOMY THE AFFORDABLE CARE ACT MINIMUM WAGE EDUCATION NATIONAL DEBT SOCIAL SECURITY/MEDICARE REVISION OF DODD-FRANK 8
- 9. OR, DOES POLICY MATTER? ECONOMIC GROWTH = LABOR FORCE GROWTH x PRODUCTIVITY GROWTH BOTH HAVE BEEN LOW NORTH CAROLINA AND THE TRIANGLE HAVE BEEN BETTER DUE TO IN-MIGRATION 9
- 10. FORECASTS CONTINUED GROWTH IN NATION AND DURHAM IN 2017 AND LIKELY 2018 8000 NET NEW JOBS IN DURHAM REGION BUT UNLIKELY AT PACE DESIRED BY THE TRUMP ADMINISTRATION HIGHER INFLATION AND INTEREST RATES “R” WORD (RECESSION) DELAYED 10
- 11. CONNECTIONS TO THE STATE 11
- 12. SINCE THE END OF THE RECESSION THE TRIANGLE REGION HAS ACCOUNTED FOR 28% OF THE STATE’S NET JOB GROWTH 12
- 13. DURHAM IS PART OF FASTER GROWTH IN THE STATE’S LARGER METROS (PAYROLL JOB GROWTH SINCE 2010) 13 0 0.5 1 1.5 2 2.5 Large metros Medium metros Small metros Non-Metros %
- 14. THE ECONOMIC COMPOSITION OF THE DURHAM REGION HAS BEEN CHANGING SINCE THE END OF THE RECESSION: DECLINING IN RELATIVE SIZE: MANUFACTURING CONSTRUCTION INCREASING IN RELATIVE SIZE: INFORMATION PROFESSIONAL SERVICES FINANCE RETAIL TRADE ARTS/LEISURE PERSONAL SERVICES 14
- 15. DURHAM’S FUTURE AND LONG-TERM TRENDS 15
- 16. AGING % Over Age 65 2010: 13% 2050: 21% 16
- 17. TECHNOLOGY IS RE-SHAPING THE WORKPLACE HALF OF TODAY’S OCCUPATIONS COULD BE DOWNSIZED DUE TO TECHNOLOGY NEED FOR RE-SKILLING 17
- 18. FORECASTED POPULATION GROWTH BY COUNTY, 2010-2050 18 AVERY BURKE CHOWAN CLEVELAND GUILFORD MARTIN ALAMANCE ALEXANDER ALLEGHANY ANSON ASHE BEAUFORT BERTIE BLADEN BRUNSWICK BUNCOMBE CABARRUS CALDWELL CAMDEN CARTERET CASWELL CATAWBA CHATHAM CHEROKEE CLAY COLUMBUS CRAVEN CUMBERLAND CURRITUCK DARE DAVIDSON DAVIE DUPLIN DURHAM EDGECOMBE FORSYTH FRANKLIN GASTON GATES GRAHAM GRANVILLE GREENE HALIFAX HARNETT HAYWOOD HENDERSON HERTFORD HOKE HYDE IREDELL JACKSON JOHNSTON JONES LEE LENOIR LINCOLN MCDOWELL MACON MADISON MECKLENBURG MITCHELL MONTGOMERY MOORE NASH NEW HANOVER NORTHAMPTON ONSLOW ORANGE PAMLICO PASQUOTANK PENDER PERQUIMANS PERSON PITT POLK RANDOLPH RICHMOND ROBESON ROCKINGHAM ROWAN RUTHERFORD SAMPSON SCOTLAND STANLY STOKESSURRY SWAIN TRANSYLVANIA TYRRELL UNION VANCE WAKE WARREN WASHINGTON WATAUGA WAYNE WILKES WILSON YADKIN YANCEY 70% or above growth 35% to 69% growth 0% to 34% growth population loss
- 19. KEY TO A PROSPEROUS FUTURE WILL CONTINUE TO BE EDUCATION, BUT….. WILL HAVE TO BE LIFELONG ALLOWING RAPID RETRAINING WILL HAVE TO BE MORE EFFICIENT AND COST-EFFECTIVE AND MORE ADAPTABLE TO THE CHANGING JOB MARKET 19
- 20. DURHAM’S ADVANTAGES IN THE GROWING SOUTH LOWER COST-OF-LIVING COMPARED TO NORTH, MIDWEST, AND FAR WEST DYNAMIC – AMENITIES ATTRACTIVE BOTH TO YOUNG WORKERS AND RETIREES 20
- 21. DURHAM’S CHALLENGES (FACED BY MOST FAST-GROWING REGIONS) TRAFFIC AND MOBILITY AFFORDABLE HOUSING INCOME INEQUALITY SHIFTING JOB AND SKILLS MARKET TECHNOLOGICAL UNEMPLOYMENT 21
- 22. QUESTIONS 22