While December may be a time of reflection, January is a time to look forward at the year to come. We did just that last week at the Raleigh Chamber’s Launch2020 event. This year, our speakers included:
- Mark Vitner: Managing Director and Senior Economist, Wells Fargo
- Natalie Rothman, EVP and Chief Human Resources Officer, Advance Auto Parts
- Christopher Chung, Chief Executive Officer, Economic Development Partnership of North Carolina
- Brian Leary, Chief Operating Officer, Highwoods Properties, Inc.
- David McLennan, Ph.D., Professor of Political Science, Meredith College
They covered 2020 topics that ranged from the economy nationwide and in North Carolina, to talent, to politics, to real estate. Here are some key takeaways for the year to come.
There is minimal risk of a recession
Despite the mumblings of concern, there is very minimal risk of a recession this coming year and next. As Vitner explained, the bar for raising interest rates is very high so the Fed is unlikely to do so. Trade policy is looking positive as the US nears a trade deal with China. Unemployment rates remain low and wage gains are accelerating for those at the lower end of the spectrum, as well as for younger workers. These all point to a healthy 2020 economy.
Raleigh recovered from the past recession much sooner than the rest of the state, lending momentum to the areas just outside the city that are poised for solid growth in 2020. Both Raleigh and Charlotte rank among the top 10 fastest growing large metropolitan areas; Raleigh ranked #3 and Charlotte ranked #7.
Job growth was strong in 2019 for the Raleigh metro and is on track to continue in the new year. From 2014-2019, the number of jobs increased 14.7%. 22,000 jobs are expected to be added in 2020; 20,000 are forecasted to be added in 2021; and 18,000 are expected in 2022. The technology sector is the driving force behind the regions growth; it showed 6.5% growth as of Nov. 2019.
Only once before has the US gone more than 10 years without a recession. The last time was in the 1990’s during the “.com” boom. Though growth may be slowing, we are entering year 11 perhaps thanks to this slow growth, as it has led to little to no excess in the economy. Given the forecasted trends, the next two years are likely to remain solid.
People are moving here; companies are following
You may have guessed this based on the traffic during your morning commute, but North Carolina is growing. Ours is the fourth largest state in the country for migration. In Wake County alone, the population grows by 63 people a day – 21 are born here and 42 move here (net). It is estimated that the population of the Raleigh region will increase 7.8% between 2019-2024.
The migration doesn’t stop at the individual level. Companies are increasingly moving into the region as well. While years ago, the primary factor determining company location may have been where the CEO lives, today it is about three key things: location, cost, and talent. Chung elaborated that though it is likely a combination of the three, talent almost always. Organizations are locating themselves where talent is and where talent is likely to move. In this aspect, North Carolina certainly has an edge. We are the #1 state for women in the technology workforce and the #2 technology hub that millennials prefer over Silicon Valley. Both Charlotte and Raleigh are among the top 20 cities for domestic migration, a metric that tends to serve as a good proxy for the attractiveness of the region’s labor market.
Don’t expect another “boring” election year
This year in politics will be anything but dull. In addition to the presidential election, there are numerous local elections taking place, an impeachment underway, and social and cultural issues continue to see their day in the sun.
According to McLennan, politics and policies are increasingly being driven by culture. We will continue to see activism surrounding issues such as immigration, gun policy, affordable and public housing, and the environment. This is likely to be led by the “millennial” and “Gen Z” generations.
Regarding the presidential election, the country is expected to see the largest turnout of voters since 1896. 74% of registered voters are “extremely enthusiastic” to vote; a slightly higher percentage of voters end up actually voting. For reference, the past three elections averaged around 60% voter turnout. Suburbs will wield great power in the upcoming elections given their growth over the past 10 years. It is likely suburbs will be where gubernatorial and presidential elections will be decided.
Overall, the speakers were optimistic about the coming year both nationally and in North Carolina. We look forward to what 2020 brings! You can view all presentations and the live stream of the event here. Curious what the predictions were last year and how they help up? Check out of recap from the 2019 Economic Forum.