Get ready for the recovery
Published January 16, 2014
By Becki Gray
by Becki Gray, John Locke Foundation and NC SPIN panelist, January 16, 2014.
If 2013 was the year of reform, 2014 promises to be the year of recovery.
Tax reform goes into effect in 2014, lowering tax rates for every individual and corporation in the state. Regular review and routine repeal of burdensome regulations will begin to loosen government’s grip on businesses, signaling that North Carolina is again open for business and welcomes entrepreneurs and investors.
Infrastructure investments and long-term responsible fiscal planning send a strong signal that we are back in the game. Education reforms will ensure those earning high school diplomas have market-ready skills; this will encourage job creators to choose North Carolina.
It’s early, of course, but we are seeing signs that North Carolina is coming out of the recession and may even rebound faster than any state in the country as our counterparts and competitors struggle to retain fiscal stability after five years of an oppressive downturn.
For the first time in five years, North Carolina is expecting an economic recovery in 2014. Consumer confidence is the highest in six years. Housing prices are increasing at a steady rate for the first time in five years. After many dark days, things are looking brighter.
According to a September 2013 UNC-Charlotte economic forecast, North Carolina’s Gross State Product is expected to grow by 3.3 percent over the 2013 level, which was 2.1 percent higher than 2012. All majoreconomic sectors are expected to grow, with agriculture surging by 16.5 percent. For the first time, total GSP is expected to exceed $500 billion.
After months with one of the highest unemployment rates in the country, North Carolina’s unemployment rate is now 7.4 percent — the lowest since December 2008. We added 56,800 jobs from November 2012 through November 2013. From June 2011 — during the first fiscal year of Republican control of the General Assembly — to November 2013, North Carolina has added 171,000 jobs, a growth rate of 4.4 percent, and faster than the national rate of 4.0 percent. North Carolina’s underemployment rate is dropping, too, down to 14.7 percent from a previous-year high of 17 percent.
The General Assembly’s October 2013 fiscal research quarterly revenue report found total General Fund revenue was up by 5.7 percent, with total tax revenue up 5.5 percent. General Fund revenue is about $80 million higher than expected. And we’re hearing rumors that the “surplus” may grow as the year progresses, alleviating the budget crunch of the last few years.
N.C. State University economist Mike Walden predicts even higher job growth in North Carolina in 2014 — more than 100,000 new jobs and a drop in the unemployment rate to 6.8 percent. He credits four factors for North Carolina’s recovery — an increase in construction, more college graduates, a growing number of retirees, and a renewed strength in manufacturing.
As the national economy improves, demand for products and output increases. As demand rises, North Carolina is poised to take advantage of new opportunities. North Carolina is the fourth-largest manufacturing state in the country and is the Southeast leader in manufacturing employment.
North Carolina’s manufacturing sector is transitioning from reliance on tobacco and furniture production to becoming a top competitor in aerospace, aviation, automotive, biotechnology, pharmaceuticals, information technology, and software. Manufacturing comprises about 20 percent of North Carolina’s GSP and is the largest source of exports from the state. Efficiencies, automation, and cost-competiveness have transformed the manufacturing industry, bringing new jobs and opportunities.
Public policy decisions are critical to the success and nurturing of any industry. Policies enacted in 2013 put North Carolina in the position to be a national leader in 2014.
North Carolina’s economy already is showing improvement. Large economies are complicated and sensitive to all kinds of influences. Decisions made at the federal level (sequestration, Obamacare) and international events (Middle East unrest, financial concerns in Europe) have an impact in North Carolina. But sound policy decisions by the General Assembly and the McCrory administration are starting to turn the state in the right direction.
During the 2012 election cycle, we were promised changes that would get people back to work and make them less dependent on government. We saw reforms enacted in 2013 that laid the groundwork to make good on those promises.
It’s been tough. It’s taken bold thinking, commitment, and a strong backbone to implement changes — making our tax system fair, loosening the grip of government regulations, ending decades of political patronage in transportation projects, and revamping a failing education system.
We’re on the right track, and in 2014 North Carolina should begin to enjoy the positive results of keeping those promises.
January 16, 2014 at 11:27 am
Norm Kelly says:
The Demoncrats are already trying to make sure none of the predictions in this post come true. They ALL know that Obamacare is going to have a HUGE negative impact on the national economy. His High Holiness has already come out to say that if unemployment benefits are not extended (again!) the nation will experience significant job loss in 2014. When job loss actually happens because of socialized medicine part 1, he will be able to point back to his prediction about unemployment benefits and try to take the pressure off the Demons.
Libs will do ANYTHING to prove that sound economic policy, tax fairness, reduced business regulation, and general freedom of choice is actually BAD for the nation, bad for the economy, and bad for the individual. They will do EVERYTHING possible to convince people that the collective is more important than the individual. It's already started with the BS about income inequality. It's the income that's unequal, stupid. It has nothing to do with qualifications, education, preparedness, the desire to do a good job. It has everything to do with a lack of government control. The central planners, formerly known as the DemocRAT party, will convince their base, and their friends in the media, that freedom doesn't work as well as central planning. The central planners can be depended on to make things more equal, therefore better. Equal WON'T mean lack of opportunity. Equal will mean the bottom will be raised up, the top will be brought down. The top will be brought down by force if necessary. Barack will do it by executive order if Congress won't act. After all, that's the way the Constitution is worded: the king gets to do what he wants, regardless of how Congress acts or even if Congress doesn't act. He's the anointed one and he's going to act like it no matter who disagrees. Just ask him. And every version of NBC will applaud. K will be right there with him, also applauding.
January 16, 2014 at 4:37 pm
Rip Arrowood says:
First, Spelling Democrat as DemocRAT is very childish and only goes to invalidate your delusional rants even more.
I wouldn't hang my hat on this John Locke fortune cookie prediction until we get a little further in to 2014 and the average Joe working people in NC realize that this smoke and mirrors tax reform is actually going to cost them more money.
The party of small government actually wants central planning - that's hilarious.
Just wait until people realize their clean water is going to be left up to the whims of corporations, the taxes on their power bills are going up and they see a few of these charter schools fold and all the money is unaccounted for - then we'll make some predictions.
January 16, 2014 at 8:32 pm
wafranklin says:
Gray, a mouthpiece for Locke and Governor Pope, once again has only pumped out propaganda for the Teabilly right. She ignores the harsh conditions imposed by the ideologues in the NCGA and Deputy Asst Governor McCroney. Once again, Locke, a propaganda mill paid for by Pope displays its ignorance. And Mr. Kelly follows all the utterly familiar FAUX talking points to the absurd. Suddenly, all rests on degrees of inequality and the strong preference for the Right and the wealthy to like extremes, under the claim equality of opportunity counts, not equality of outcomes. No, folks, that is gross insanity! The game is rigged top to bottom to achieve such inequalities as pleases the 1-5% -not the 95%. Saying otherwise is a simple bald faced lie! And Pope knows all about that.
