The Greater Raleigh Chamber of Commerce recently held their annual Economic Forecast which gave a review of the economic performance in 2018 and looked ahead to the priorities of 2019. Hosted by Gerald Owens, anchor at WRAL-TV, the Economic Forecast featured presentations from Thomas Barkin, President and CEO of the Federal Reserve Bank of Richmond, and Charlie Dougherty, VP and Economist at Wells Fargo. The two speakers then answered questions from the audience.
The morning meeting focused on growth indicators such as the GDP and employment rates before broadening to also cover the drivers behind those indicators and what they are expected to do in the new year. Here are some key points from each speaker:
Thomas Barkin, President and CEO, Federal Reserve Bank of Richmond
- Economic Growth: 2018 finished with a strong performance; GDP grew 3.3% and was coupled with low unemployment and an increased number of jobs. Growth will continue in 2019, though likely at a slower pace. While there are disparities between the growth of urban and rural areas, these gaps are closing.
- Growth Insights: Two critical aspects to sustaining long-term growth are the labor force and productivity. Labor force participation will need to increase through the involvement of previously low-participation groups, which can be assisted through workforce development initiatives, improved benefits, and increased flexibility with work location and hours. Productivity has been strong thanks to new technological advancements but has recently slowed due to a lack of business investment. As Barkin explained, much of this is attributed to fear of another recession.
- 2019 Priorities: Because he believes labor force participation and productivity are key, Barkin laid out a few priorities that are closely tied to these two metrics. He encouraged policies to help draw potential workers into the labor force, such as paid maternity leave to incentivize women, and early workforce development to encourage college graduation or alternative options. Legal immigration should be embraced, as it is closely tied to new technologies, startups, and increased consumer spending. Finally, businesses need a healthy environment in which to function that consists of clear rules and stability.
Charlie Dougherty, VP & Economist, Wells Fargo
- Economic Growth: The growth outlook for 2019 remained consistent and is predicted to slow slightly from 2018. Last year’s strong GDP was driven by strong consumer spending and the fiscal stimulus that added to the GDP. That stimulus, however, is expected to fade in the coming year.
- Growth Insights: There are a number of global indications to the economic performance of this coming year. The sentiment of the manufacturing industry, which historically correlates well with GDP, is weakening from previous numbers but is still well above average. The same holds true for oil prices. Though they may be low, the US still has strong production of oil. The labor market remains very strong and consistent. It recently boasted 100 consecutive months of positive change and is a strong driver of consumer spending and growth.
- Raleigh and the Southeast: The Southeast is home to some of the fastest growing economies in the nation and North Carolina is no exception. The state is growing faster in hiring than the rest of the nation, across all industries. Hiring is expected to slow slightly in the Southeast region but will still be above the national average. Unemployment is already low but predicted to go even lower in North Carolina. This is expected to continue to push up wages. Thanks to strong tech and energy sectors, both Charlotte and Raleigh were among the top 15 fastest growing metro areas in the country.
Both speakers shared an optimistic view of 2019 for North Carolina. Unemployment will continue to fall as almost 90,000 new jobs are added across industries. The state will continue to benefit from a growing population of job seekers drawn to the success of the region and competition for top talent will be fiercer than ever. If you are one of the many businesses growing your team this year, this presents an exciting opportunity, but also a lofty challenge. Let Greene Resources help you make the most of this opportunity and find the right person to make a lasting impact on your business in 2019 and beyond.
Watch the complete Economic Forecast here.