Disconnect exists between NC business climate, unemployment rate
Posted July 13, 2012 2:55 p.m. EDT
Updated July 13, 2012 11:11 p.m. EDT
Raleigh, N.C. — Once again, North Carolina is ranked high on the list of places to do business in the U.S. But the state also has the nation's fourth-highest unemployment rate, at 9.4 percent.
Experts say the disconnect between business climate and employment comes down to regional differences across the state's 100 counties.
The Triangle and other metropolitan areas are faring OK, with the highest unemployment rates concentrated in rural areas where companies aren't looking to do business.
"There's a bunch of reasons why that disconnect is going on," said Ronnie Chatterji, an associate professor at Duke University's Fuqua School of Business.
One is North Carolina's heavy reliance on manufacturing industries, which is higher than most states, Chatterji said.
"When manufacturing takes a hit, North Carolina takes an especially hard hit," he said.
Another reason is the relative dearth of college graduates in rural areas of the state, he said.
"The unemployment rate is very low (for people) with college degrees," he said. "Two-thirds of North Carolinians don't have a college degree, and unemployment rates are very high for that category."
Still, business news cable television channel CNBC recently listed North Carolina No. 4 nationwide for top states for business.
CNBC used a weighted formula of 10 categories to come up with its rankings, and North Carolina ranked in the top 10 in three of them – workforce, technology and business friendliness.
"It's still a state that is open for businesses (and) very conducive to businesses," said Lew Ebert, president of the North Carolina Chamber.
The state's economy was its worst category, at 31st nationally, according to the rankings.
"We're most concerned about the cost of doing business. We actually went from ninth a year ago to 21st," Ebert said.
Chatterji said North Carolina's frequent appearance on Top 10 lists also could be playing a role in the state's sluggish economy. Many people are moving to the state without a job because it sounds like at attractive place to live, he said.
That's not a reason for long-term concern, however. He said that, when the economy turns around, those people will find jobs and better position North Carolina during the rebound.