Local business leaders were encouraged at a recent Ballantyne chapter of the Charlotte Chamber of Commerce meeting to help the local and national economy by finding innovative ways to add jobs back to the workplace.
John Connaughton, director of the Babson Capital/UNC Charlotte Economic Forecast, a leading source of economic information for North Carolina, spoke at the Feb. 7 meeting at the Ballantyne Hotel & Lodge about the current economic state both locally and nationally, addressing issues concerning the recent fiscal cliff and a looming fiscal cliff months away.
“All of you thought it was over and done with, but not so much,” Connaughton said. “What Democrats were saying is we can’t solve the fiscal crisis until we raise taxes; Republicans say it’s not taxes, but we need to make budget cuts. It’s not spending or tax rates – it’s jobs – that’s the problem.”
Since 2007, the United States lost around 8.7 million jobs and has so far gained 5 million back, according to Connaughton. In North Carolina, 333,400 jobs were lost overall, with the state gaining 46 percent back, Connaughton said, a rate that he says will lead to a stabilizing economy in two years – seven years after the recession hit. He says Mecklenburg County has done a good job at gaining and producing more jobs, though there are still people in the area who need help.
Most jobs were lost during 2008 and 2009, he said, when construction and manufacturing industries saw big hits and slashed budgets and pushed layoffs. But as the economy took a turn in 2010, available jobs took a different face with a different skill set, leaving the unemployed still unemployed with no new prospects – causing many to leave the workforce altogether. As of December, the unemployment rate in North Carolina was at 9.2 percent, the fifth highest in the nation, though the rate is based on the number of people actively seeking employment, Connaughton said.
“Historically, 67 percent of the population are working or are actively looking for a job. But in recessions, things are different,” he said. “Right now, 63 percent of the population are working or actively looking for a job. What we’ve seen are people dropping out of the labor force, both in North Carolina and the United States,” adding that the real unemployment rate stands somewhere around 12 percent. “We need to find more jobs for these people.”
But Connaughton said there is still hope. While he projects the first half of 2013 will continue to be slow and tight for businesses and families as most saw pay cuts from raised taxes, he foresees the second half of the year to pick up as consumers are starting to go back into debt, a good thing for the economy, by buying homes and cars.
“Consumers have been on a down over the past five years. What Congress needs to learn is what decisions they make about economics doesn’t matter. Just make a decision and make the rules,” he said. “Both decisions are good for the economy – one might be better – but both are good. Just make a decision, otherwise it makes consumer confidence go down.”
Lee Whitley, co-owner of Big Frog Custom T-Shirts & More, a digital printing clothing company in the Toringdon Market shopping center in Ballantyne, opened his business in south Charlotte around 14 months ago, he said, because of the area’s demographics and daytime population. Last year, his business saw more sales than originally projected, though January was a slow month, Whitley said. He expects sales to pick up in March.
For Whitley, he said Connaughton’s projection of consumer confidence picking up later this year is hopeful.
“Opening the business, we created three jobs in addition to the owners. As any business owner, the macro view of what (Connaughton) was talking about the second half of the year picking up is good to know from that standpoint,” Whitley said.
“We’re not getting a lot of sales at this moment, but with different contacts and when spring hits, I’m confident sales will pick back up.”