Economist: NC business climate is strong, despite recent corporate layoffs
Posted January 14, 2015
Chapel Hill, N.C. — Banana producer Chiquita Brands International's notice Wednesday that its headquarters will leave Charlotte by the end of next year – a loss of about 300 jobs – is the latest in a series of similar announcements from several large companies and corporations in recent weeks.
Is it a coincidence, or is it a snapshot of North Carolina's business climate?
Brent Lane, director of the Carolina Center for Competitive Economies at the University of North Carolina at Chapel Hill, says the announcements are hardly devastating to a state of nearly 10 million people.
The biggest issue, he says, might be the perception that big businesses are pulling out of the state.
"In many ways, decisions to come to North Carolina and to leave are more important from a marketing perception than they are from an economic standpoint," Lane said Wednesday.
He equates those notable losses – including drug manufacturers Hospira in Clayton and GlaxoSmithKline in Research Triangle Park and skin care products and cosmetics retailer The Body Shop in Wake Forest – to ego blows and says the core of North Carolina's business climate is strong.
"We're seeing broader economic growth, most of that coming from 300,000, 400,000 relatively small businesses in the state," Lane said. "(They are the) ones that don't get headlines when they open a new facility or add a handful of jobs. That's really the core of the state economy. That's what drives income growth in North Carolina."
Right now, Gov. Pat McCrory is in the United Kingdom with North Carolina Commerce Secretary John Skvarla working on recruiting businesses to the state.
Lane says investing in those types of high-profile "home runs" is critical to marketing North Carolina. Also critical, he says, is keeping it balanced.
"It's like baseball. Occasionally, you're going to bring in a free agent – that home-run hitter that you think is going to bring people to the seats," Lane said. "But those are free agents, and when they come for the money, they will leave for the same reason."
Lane says he doesn't classify them leaving as a failure unless the state focuses too much on big businesses and not enough on the locally owned and operated businesses.