Economic Trends

Companies, Jobs and Incentives: quantitative analysis of regional economic data

The regional economy proximate to Rowan County began from a common tradition but now has a varied development level and growth rate. In the modern post-industrial economy, economic development practices are diverse and specialized with a focus is on fostering existing businesses and sector-based recruiting of small and mid-sized companies.

Seeking to ascertain the quantity of companies newly locating or expanding in the region, the quantity of people employed by these companies, the role of monetary incentives in these new locations and expansions and the relationship between these companies, jobs and monetary incentives, this paper details an analysis of quantitative, multi-year data. The goal of the research is to provide greater understanding on the local and regional economy, economic development practices and influence future public policy decisions. Eight data items were developed to evaluate the research questions for the period of 2004- 2007 in a region defined as the ten Counties of Cabarrus, Catawba, Cleveland, Davidson, Gaston, Iredell, Mecklenburg, Rowan, Stanly and Union. The non-partisan NC Department of Commerce Community Investment Reports (CIR) and partisan, anti-economic development North Carolina Institute for Constitutional Law The Incentives Game study provided the source data.

1294 new and expanded companies located in the region creating a total of 52,930 jobs or an average of 40.9 jobs per company translating to growth primarily through small and mid-sized companies and expansions. Companies locating or expanding in Rowan County were above this average in size and Rowan has received its representative share of very large locations or expansions. 105 incentives were awarded for a total of $53,986,117 with an average incentive of $514,153. The role of local economic development incentives is not as clear as the quantity and size of new and expanded companies. Incentives are a factor in the job growth paradigm but the relationship is ambiguous and difficult to generalize.

The full report is in final draft and review at this time. It will be available for download from the Salisbury-Rowan Economic Development Commission upon completion. Please contact Stuart Hair if you have comments, questions or would like a copy of the report upon final revision.

Statistics and Analysis

Rowan County’s overall labor force had strong growth at the start of 2007, but it has been unsteady and unemployment has dramatically increased since April.

As illustrated in the Labor Force Chart (Figure 1), since the end of 2006, two distinct events are occurring in Rowan County resulting in a dramatic change in the labor force. The first trend appears to be weak local absorption of labor growth. This year about 1,400 people joined the local labor market, while the local employment level decreased by almost 400 resulting in the number of unemployed increasing by about 1800. From April to May 2007 (latest figures available from the Bureau of Labor Statistics), this trend continues with overall growth of 488 people but only about 100 people added to the employment roles while just under 400 were added to unemployment. Essentially, labor force growth is occurring, not being employed and then the Freightliner mass lay-off occurs.

Figure 1: Labor Force Chart

Contrasting the Rowan County unemployment rate with the overall rate for the State of North Carolina and the Charlotte Combined Statistical Area provides further insight in the local economic health. As illustrated in Unemployment Rate Chart (Figure 2), through March, Rowan County’s unemployment rate follows a similar pattern as the region and State. In April and May, the rate has spiked to almost 3% higher than the rest of Charlotte and over 3% higher than the rest of the state.  As previously mentioned, the unusual increase in unemployment is exasperated by the Freightliner layoff and it remains to be seen as to the tenure of these spikes. Traditionally, Rowan’s unemployment rate curve is similar to the region’s and State’s curves and the County’s economy is integrated within the region and State. So, the rising tide can be reasonably expected to proverbially raise Rowan’s boat and hopefully the laid-off employees will find employment in the larger economy.

Figure 2: Unemployment Rate Chart

The core message of these statistics and analysis is that Rowan has been hard hit by the lay-off at Freightliner and an overall weak economy resulting in a two-fold punch and much higher local unemployment.