RALEIGH (AP) ó For most of 2008, North Carolina’s economy managed to outpace the rest of the country as the housing slump, credit crunch and Wall Street collapse led the country into a recession.
It didn’t last.
Companies starved of credit and customers pulled the plug on workers late in the year, unleashing a sudden wave of layoffs that pushed North Carolina’s jobless rate to 7.9 percent in November ó highest in a generation.
Only Rhode Island had a bigger jump in unemployment rate than North Carolina between November 2007 and last month, when the state lost 46,000 jobs ó a total exceeded only by Florida, a state with nearly twice as many residents. The final word on the year’s job losses won’t arrive until January, but as 2009 approaches, there are no clear signs a recovery will arrive anytime soon.
“It’s going to be a rough year,” said outgoing state Treasurer Richard Moore, who spent the last eight years as the state’s chief investor. “You’re going to continue to see unemployment increase.”
Manufacturers led the layoffs surge, cutting 32,500 jobs statewide through November. Big names including Georgia Pacific Corp. and Thomas Built Buses laid off hundreds, while Freightliner LLC permanently dumped 1,500 people at its Rowan County truck plant. Apparel company HanesBrands Inc. was among those announcing plans to shutter plants entirely, including one in China Grove.
At Western Carolina Industries Inc., a nonprofit that provides companies with advice on human resources issues, chief executive Fred Reese said the majority of calls from employers toward the end of the year asked about how best to handle layoffs.
“We expect we’re in the midst of a number of layoffs that have begun or will begin after the first of the year,” Reese said. “Certainly most manufacturing firms are trying to make cuts but not decimate their work force, maybe make it in stages.”
Reese said many manufacturers are trying to be cautious about cutting back work forces they’ve spent millions to train in recent years, as the state’s economy was booming. But such patience may only last until the middle of next year, he said.
“If we get to the summer months and we don’t see signs for recovery, then I would expect to see another layer of layoffs,” Reese said.
It won’t be until early 2009 that the extent of the job losses are known along Charlotte’s Tryon Street, where Bank of America Corp. is still analyzing plans to eliminate as many as 35,000 jobs companywide as it suffers through the recession and brings Merrill Lynch & Co. into its fold.
Cuts are sure to come, too, a few blocks away at the former Wachovia Corp., as Wells Fargo & Co. completes an integration of the two banks that’s expected to take the next few years. Wachovia has about 20,000 employees in Charlotte, which is set to become the company’s eastern headquarters, but San Francisco-based Wells Fargo hasn’t announced the size or timing of any job cuts.
Not even NASCAR is immune. Teams across the largely North Carolina-based sport ó from topflight Hendrick Motorsports to second-tier shops such as Petty Enterprises and Dale Earnhardt Inc. ó have let hundreds of employees go to cut back on spending. Some teams are even still struggling to find sponsorships for next season as the nation’s domestic auto industry teeters on the brink.
There are hopes statewide the economy will get a boost from President-elect Barack Obama’s proposed stimulus package of spending on big money projects: building and repairing roads, bridges and water treatment plants.
A coalition of 26 North Carolina cities from Boone to Jacksonville said in December it had $2.8 billion worth of infrastructure projects that could start within four months of funding approval, creating up to 100,000 jobs. The North Carolina League of Municipalities said the state’s smaller cities and towns also have hundreds of millions worth of ready-to-go projects just waiting on some federal money.
Gov. Mike Easley, in his final days in office, even called for a state stimulus plan, vowing to seek approval in January to begin more than two dozen state building projects valued at more than $700 million that could generate 26,000 new jobs. And incoming Gov. Bev Perdue, who takes office Jan. 10, has promised to present lawmakers with a stimulus plan of her own.
State commerce officials aren’t cutting back on their targeted efforts to create jobs, and plan to focus in 2009 on about a dozen industries that promise good wages. The most promising prospects include aircraft engines and parts, transportation equipment, and data centers similar to the one Google opened in 2008 near Lenoir.
Commerce Secretary Jim Fain said North Carolina also plans to chase companies in life sciences, food production and services, solar-energy equipment production, nuclear services projects, and maybe even a few corporate headquarters.
“Obviously, we are not immune from the plethora of factors effecting the economy. That said, we remain relatively busy,” Fain said before two days of business recruiting trips in the days before Christmas.
FedEx Corp.’s long-awaited $500 million distribution hub is expected to open in mid-2009 at the Piedmont Triad International Airport, creating about 1,500 jobs. Honda’s first foray into aircraft ó a light business jet ó is expected to begin production at the Greensboro airport in 2010, but worker training will get started in the first few months of next year.
“The most important quality-of-life factor is having a good job,” Fain said. “The key to enjoying a well-paying job is education and skills development.”