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Charlotte to see growth in 2014, but labor issues could pose challenges, economist says

Charlotte’s economy is expected to see stronger growth in 2014 than last year, but discouraged people dropping out of the labor force will hurt the area’s chances of attracting companies, an economist said Wednesday.

Gus Faucher, senior economist with PNC Financial Services Group, said the Charlotte metro area re-corded a roughly 1 percent decline in the number of people in the labor force as of November compared with a year ago. That’s higher than the 0.4 percent contraction in the U.S. labor force over roughly the same period, he said.

The loss of 9,000 people from Charlotte’s labor force over that period might discourage companies from coming to the region, said Faucher, who was in Charlotte Wednesday to speak at a British-American Business Council event.

“When they’re looking to locate in an area, they want to know is there a pool of people we can hire,” said Faucher, who is based in Pittsburgh. “If the labor force is contracting, that means the pool of people is smaller. There is this concern that people’s skills atrophy when they’re not at work or in the labor force.”

North Carolina recorded a decline of 2.3 percent in its labor force as of December from a year ago, as 110,000 workers dropped out, Faucher said.

“That’s huge,” he said, “much, much bigger declines in the labor force proportionally for North Carolina and Charlotte than for the U.S. as a whole.”

Labor issues aside, Charlotte’s economy is poised for improvement this year in part as its financial services industry continues to rebound from the financial crisis, he said. Although the banking industry is adjusting to new regulations, it is also expected to see a rise in lending and investing, he said.

“I think Charlotte is going to benefit from that.”

He said Charlotte’s economy is also expected to benefit from the Federal Reserve’s decision Wednesday to continue cutting back on its stimulus program, which has helped keep long-term interest rates low.

“That’s going to help profitability in the financial services industry, and I think that’ll be a positive for Charlotte this year.”

Pittsburgh-based PNC is the 12th-largest bank by market share in the Charlotte metropolitan area, according to federal data.

Roberts: 704-358-5248; Twitter: @DeonERoberts
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