Triad held back by relative lack of tech jobs, but aerospace and other high-end manufacturing are ready to bust out: UNC economists
The good news: A new way of judging the economic growth of metropolitan areas shows the Triad isn’t declining.
The bad news: The same technique shows the Triad isn’t growing so far in 2022. And it’s near the bottom in growth rates among the 50 largest metro areas in the United States as defined by this method.
This is all from the first report in The American Growth Project by the Kenan Institute of Private Enterprise at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. The project is an initiative of the institute to provide fresh economic data for towns, cities and counties, with the goal of supporting leaders in government and business as they develop their local and regional economic development and workforce-building plans.
The initial report reflects a recognition that most ways of defining metropolitan areas in economic terms are based more on geography than contemporary economic connections. For example, the U.S. Census Bureau considers the Raleigh-Cary and Durham-Chapel Hill areas separately for many purposes, but the UNC economists who live there know the communities function economically as one. The Kenan Institute researchers developed definitions of metro areas that they believe better reflect how metropolitan areas function economically. They call the results extended metropolitan areas, or EMAs.
For purposes of the first report, the Triad – referred to as “Greensboro” – consists of Guilford, Forsyth and eight contiguous counties from Alamance to Surry, as do most definitions of the Triad, including that of the Piedmont Triad Partnership, the regional economic-development coordinating organization, though they left out two relatively small counties usually linked to the Triad: Caswell and Montgomery.
The economists then gathered data more recent and broad than what goes into many official government reports in an attempt to reflect up-to-date conditions. Often, federal area economic assessments use data that in effect can be as much as two years old. While there are limitations to their methodology, which the researchers say they’re working to refine, they believe their results better reflect what’s going on in metro-area economies as it happens.
“Our goal is to actually help businesses and policy makers make decisions that will support economic growth. And we're just scratching the surface on this,” Kenan Institute Chief Economist Gerald Cohen said in an interview last week.
expandWhen the data was gathered and the 50 largest metro areas as the method determined them were ranked by economic growth rates through August, the Triad came out fifth from the bottom. It was ahead of four areas found to have shrunken in economic terms: Milwaukee, Virginia Beach, Memphis, and Detroit, and effectively tied with St. Louis. Just ahead were Cleveland, Birmingham, Cincinnati and Hartford with growth rates of one to four tenths of a percent.
At the top were some of the proverbial usual suspects: the San Francisco Bay area, Austin, Seattle, the combined Raleigh-Durham EMA, and Dallas. Denver, Salt Lake City, Charlotte, New Orleans and Orlando rounded out the top 10. The researchers noted that only North Carolina had two top-10 metro areas. Raleigh-Durham's growth 2022 growth rate was put at 3.4%, and Charlotte’s at 2.5%. San Francisco leads at 4.8%.
There’s no single answer to why the Triad appears to not fare so well, but Cohen pointed to some possible explanations. One, its population simply isn’t growing as fast as the top metro areas. Also, it’s likely still feeling the effects of precipitous declines in the textiles and furniture industries. And it lacks, at least in relative terms, something that the researchers jumped out about the top-growth areas: big tech industries.
“Software developers get paid a lot because every line of code or sets of line of code can be extremely valuable,” Cohen said.
“If you send a plane full of textiles to China versus sending a plane full of (computer) chips to China, they're both going to weigh the same but the plane full of chips … the value of that is substantially higher.”
Cohen took part in a recent Tar Heel Bus Tour that stopped in Burlington, Greensboro, Winston-Salem, and North Wilkesboro and expressed optimism and admiration for the region, particularly its moves into advanced manufacturing, especially aviation and aerospace. Modern manufacturing is often highly tech-oriented, very well-paying, and can be extremely productive, he noted, and should not be taken lightly. It can also often be entered through less-than-four-year-college education.
“Historically the answer is more education, more investment in infrastructure. And I'll say those are still going to be the overarching answers, but we're not saying it has to be more college education necessarily.”
In addition, logistics, another burgeoning sector in the highway-rich, geographically advantageous Triad, serves to link a metro area to other, often prospering, areas. Eastern Pennsylvania, for instance, is linked to New York City through the logistics industry, he noted.
“In some respects you're tying your fortune to other areas, which is good. And our models try to incorporate that but, imperfectly,” Cohen said. “In some respects it's an industry that, because of technology has become much more efficient. You have a combination of mechanization of warehouses and greater monitoring of inventories and of trucking and where, where assets are located and how to utilize those assets.”
Greensboro Extended Metropolitan Area at a glance
A look at the Triad as an Extended Metropolitan Area as determined by The American Growth Project at the Kenan Institute of Private Enterprise at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill: