The Greater Raleigh Chamber of Commerce held their annual Economic Forecast on Wednesday, January 3. This event provides a glimpse of what economic and hiring trends in 2018 we can expect to see locally, nationally, and internationally. The Economic Forecast was hosted by David Crabtree, anchor at WRAL-TV. Presentations were given by Mark Vitner, managing director and senior economist at Wells Fargo, and Mark Yusko, founder, chief investment officer, and managing director of Morgan Creek Capital Management. Mr. Vitner discussed the upcoming national and local trends to expect within the economy and Mr. Yusko provided insight on the global economy and how that will change over the next year.
Both Mr. Vitner and Mr. Yusko provided extensive data and analytics in their discussion, including several areas in which they disagreed. Below is a brief overview of the conversation.
Mark Vitner, Managing Director, Senior Economist, Wells Fargo
View Mr. Vitner’s presentation here.
- Economic Growth: Real GDP growth accelerated during the second and third quarters of 2017. The improved pace of growth appears to be carrying over in 2018. Growth is not only stronger but much more broadly based. Growth will cross into new regions outside of metropolitan areas, as evidenced by housing starts.
- Tax Reform: Corporate tax cuts have finally become a reality. This will probably impact the way businesses strategize for the coming year. Expect consumer spending and business investment to grow along with increased spending on infrastructure at the local level.
- Rates & Trends: The post-financial crisis era is over. Monetary policy is now focusing on normalizing interest rates and financial regulation. Mr. Vitner expects the Fed to raise interest rates three times in 2018.
- North Carolina Impact: North Carolina’s economic recovery gained considerable strength during the past couple of years, although gains have largely been limited to the Triangle and Charlotte. Growth is now broadening to include most metro areas. Expect another 25,000 jobs to be added to metro areas and their outlying regions.
Mark Yusko, Founder, Chief Investment Officer, Managing Director, Morgan Creek Capital Management
View Mr. Yusko’s presentation here.
- Economic Growth: Efforts to generate growth through tax reform, fiscal stimulus, and other methods will likely be unsuccessful due to an aging population. Efficiency will continue to decline as a result of baby boomers aging out of their most productive years (ages 45-65).
- Tax Reform: The recent tax reform legislation will continue to perpetuate income and wealth inequality within the United States. Businesses are optimistic regarding tax cuts, but Mr. Yusko likens these tax cuts to those of the early 1980s and anticipates higher taxes within eight years.
- Rates & Trends: Despite positive rhetoric regarding the economy, actual GDP growth has been moderate at best, and job growth is beginning to fade. Mr. Yusko predicts the value of the dollar will fall, the increase in the deficit will lead to lower economic growth, and it seems like interest rates will not rise as much as expected.
- International Impact: Economic growth is most clearly seen in countries with a developing economy; China, South Korea, and India are all on the rise.
As shared by the speakers, the timeline for continued economic growth is certainly debatable. Something on which both speakers agree, however, is the vibrancy of the Triangle. The Triangle continues to grow twice as fast as the nation. The Triangle continues to benefit from affordability migration, a trend in which people are leaving larger, more expensive cities for more affordable, mid-tier cities.
Hiring Trends in 2018
From Greene Resources’ point of view and from a hiring standpoint, the Triangle economy fairs well for the job seeker. Indeed.com recently completed its 2018 Employer Outlook Survey to find that 90% of recruiters expect to hire at least the same amount if not more people as they did in 2017. With both the North Carolina and the national unemployment rate at close to 4%, and the Triangle unemployment rate hovering around 3.6%, businesses will be faced with fierce competition to locate and land talent for their team.
When it comes to competing for those job seekers, success will likely be determined by the employee experience. A recent Gallup survey of job seekers showed that competitive pay and benefits are still important, however, it is also important for employees to clearly see where they fit in the company, where they can grow, and how the company will help them learn and develop. When it comes to locating the best talent for your company, we believe connecting with Greene Resources will help ensure continued success.
Want more information on economic and hiring trends in 2018? Watch the 2018 Economic Forecast here.