Business

Charlotte’s recovery – 6 years after recession

The downturn of 2007-2009 was the first time Charlotte custom contracting firm Andrew Roby had to lay off workers in its 60-year history. But since those dark days, the company has expanded as the economy strengthened, and Roby now boasts twice as many workers as before the recession.

Demand for patio renovations and master bathroom improvements has helped fuel business, and the company has more than doubled its employee base, said David McGuire, chief operating officer of construction.

“That was a tough time,” McGuire said. “Since then, we’ve been steady climbing.”

The end of June marked six years since the end of the worst national economic crisis since the Great Depression.

The recession hit the Charlotte-area economy hard. But it has since been one of the fastest areas in the U.S. to snap back, and that’s perhaps most evident in labor-market improvements.

In the past, Charlotte has often shrugged off national recessions, giving it a swagger as a booming New South city. But the latest recession hit hard, sending the unemployment rate to almost 13 percent. While the jobless rate has fallen by more than half, to 5.6 percent, it still remains slightly higher than the rate for the U.S. and some Southeastern cities.

And as is the case across the nation, not everyone has benefited equally from the labor market progress.

Local and national wage growth has been uneven because lower-pay jobs such as food services grew faster than other higher-paying ones like financial services. Overall job growth has picked up meaningfully, though.

Construction was one of the areas ravaged during the recession as development in Charlotte lagged, but it has picked up along with the overall economy, underscoring the job revival.

“The thing about construction here is that it isn’t just back to life,” said Rick Kaglic, a Charlotte-based senior economist at the Federal Reserve Bank of Richmond. “It’s roaring back to life.”

‘Best job I’ve ever had’

Uncertainty surrounded the recovery in Charlotte, best known as a banking town, because the crisis was centered on the financial services sector, says Mark Vitner, a Charlotte-based senior economist at Wells Fargo Securities.

“A lot of folks thought we would have a really long road back, but Charlotte has been one of the fastest growing metropolitan areas since the recession,” Vitner said, adding that the city has also benefited from an influx of new industries.

Mecklenburg County lost more than 31,500 jobs from 2007 to 2010. Since then, it has added more than 75,000. That brings the county’s payroll count to more than 610,000, well above its pre-crisis level, according to the N.C. Commerce Department.

The thing about construction here is that it isn’t just back to life. It’s roaring back to life.

Rick Kaglic, senior economist at the Federal Reserve Bank of Richmond

Andrew Chamberlain, senior economist at Glassdoor, recently analyzed three major labor market categories – unemployment, the number of jobs, and wages – to come up with a list of the 15 U.S. cities that have fared the best since the end of the downturn.

Charlotte ranked No. 9 overall, and No. 2 for the biggest decrease in unemployment.

Job-seeker Latarah Coney, 34, a single mother of three in Charlotte who left her housekeeping job last summer to become a paralegal, is a beneficiary. Her new job pays twice as much and offers better hours and benefits. The move came after she completed a four-week Jacob’s Ladder Job Readiness Program to improve her resume and to practice interviewing.

“This is the best job I’ve ever had in (my) adult life,” said Coney, who moved to Charlotte in May 2013.

Diversifying economy

Economists say Charlotte has strengthened its economy by diversifying – not relying too much on one industry over another. Over the past six years, 28 companies have relocated corporate headquarters to Charlotte, according to the Charlotte Chamber.

Some include Electrolux, which moved to Charlotte from Georgia in December 2009, marking the city’s largest headquarters move in a quarter century. MetLife also announced the move of its retail business to Charlotte in March 2013, and Bubble Wrap maker Sealed Air said last year that it’s moving to Charlotte from New Jersey.

Others that started here are expanding their footprints. Software company AvidXchange, for example, expects to hire about 150 workers a year for the next four years or so.

Job growth is also being helped by Charlotte’s overall population boom, making it now the 22nd biggest U.S. metro area.

The business and population expansion has helped fuel a boom in construction for the multifamily buildings that attract young workers, as well as offices. Charlotte has four office towers proposed or underway in uptown and South End, along with two more in SouthPark and another expected in Ballantyne.

Construction jobs have taken off along with that, although the sector remains a small part of the economy. Mecklenburg’s construction employment plunged almost 35 percent from 2007 to 2010 but has grown more than 20 percent to more than 28,200 jobs, according to the state Commerce Department.

 

Although employment has increased, wages haven’t always risen as fast, thanks in part to growth of low-wage jobs. Mecklenburg County’s leisure and hospitality sector, for example, didn’t lose any jobs during the recession and since 2007 has grown by almost 22 percent.

Job seeker’s market

Builders have scrambled to accommodate the influx of new, often young, residents, as evidenced by the boom in multifamily construction. Among the companies benefiting are Greensboro-based Samet Construction, which opened a Charlotte office in 2008 and has added employees.

Today, Keith Price, the company’s director of operational excellence, says as the economy has improved and more construction jobs have opened up, hiring qualified workers has become harder.

“It was very much an employer’s market at the time. There was an opportunity to see a number of candidates, the luxury to be able to take your time,” Price said. “Contrast that to today, when the market has turned. It’s very much a job seeker’s market.”

The number of construction jobs also seems to have grown substantially relative to the number of people available to fill them, Price said, because so many people left the industry entirely during the downturn.

“In some positions, there is a shortage because of the exodus of talent,” Price said.

That shortage means customers are fighting for subcontractors, too. These days, Chris Harrill, a second-generation electrician and business owner, says he often has to refer potential customers to other electricians. He also has to pass up job opportunities.

“We have the same volume of work with a third less people than we were doing eight years ago,” said Harrill, owner of ARC Electric Co.

For Andrew Roby, the Charlotte-based contractor, business has heated up as real estate values increased, giving customers the wherewithal not only to spend, but to spend on nonessentials such as additions of outdoor kitchens integrated into pool settings.

“Anything outdoors that gives it that vacation at home feel,” McGuire said, “that’s been really popular, and that wasn’t always the case some years ago.”

Katherine Peralta: 704-358-5079, @katieperalta

Loss of ‘bedrock’ jobs still a problem

Not everyone is joining in the job boom.

More than 277,000 North Carolinians are looking for work, according to recent figures from the North Carolina Justice Center’s Budget and Tax Center. Almost 30,000 more people were looking for work statewide in June than at the start of 2015, the center found.

And regional growth hasn’t been even.

Mecklenburg-area wage growth has been more robust, economists say, because the types of jobs being added in Charlotte, such as those in technology and financial services, tend to pay higher than those added in rural areas.

Often less densely populated areas in North Carolina are more reliant on single industries, like textiles, and plant closures can paralyze communities. The closure of Lincolnton textile manufacturer Mohican Mills last month, for example, triggered the loss of more than 150 jobs as well as the city’s biggest water customer.

Patrick McHugh, an economic analyst at the Budget and Tax Center, calls the loss of bedrock, middle-class jobs in fields like manufacturing “quite distressing.” As is the case nationwide, loss of those jobs translates to unequal wage distribution.

“All the growth is concentrated either at the very top end in terms of business and professional services that pay really good wages or at the very bottom end like retail, food services, recreation – a bunch of marginal jobs with very little opportunity for advancement,” McHugh said. Katherine Peralta

Mecklenburg County Employment by Industry, 2014

Sector

Percent of total

Goods-Producing

5.02%

Natural Resources and Mining

0.08%

Construction

2.32%

Manufacturing

2.62%

Service-Providing

44.98%

Trade, Transportation, and Utilities

10.92%

Information

1.70%

Financial Activities

5.32%

Professional and Business Services

10.43%

Education and Health Services

8.43%

Leisure and Hospitality

5.57%

Other Services

1.21%

Public Administration

1.40%

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