Around the Region: N.C. economy forecasted to grow 2.7 percent this year

Published 4:25 pm Friday, June 3, 2011

North Carolina’s economy should grow 2.7 percent this year, an improvement from the sluggish 1 percent growth seen last year, said UNC Charlotte economist John Connaughton.
In his latest quarterly forecast, Connaughton forecasts North Carolina will gain 64,700 net jobs this year, giving the state a 1.7-percent employment increase compared to December of last year.
Connaughton, an economics professor at UNC-Charlotte, said the state’s economy started last year with strong growth, but it slowed during the spring and summer quarters. He said the wholesale trade, retail trade and services sectors are helping lead the N.C. economy to stronger growth this year. The UNC economist forecasts growth in seven of the state’s top 11 economic sectors, including wholesale trade (5.1 percent growth estimate), retail trade (3 percent), services (3 percent) and mining (2.3 percent).
The other sectors expected to grow this year are: finance, insurance and real estate (1.5 percent); government (1.1 percent); and nondurable goods manufacturing (0.3 percent).
The wholesale trade, retail trade, services and finance, insurance and real estate sectors are expected to lead the state’s job growth.
The N.C. Senate has passed a $19.7 billion spending plan that includes funds to reduce class sizes by hiring more grade-school teachers, but cuts education funding in multiple other areas. The Senate approved the budget, which would take effect July 1, on a preliminary vote along party lines Wednesday and it was expected to give it final approval yesterday. The budget, opposed by Democrats in the Republican-controlled Senate, is expected to head to the N.C. House for votes today and tomorrow before heading to the desk of Governor Bev Perdue.
Perdue has criticized the spending plan, which she said will result in layoffs of teachers and teacher assistants across the state, while also cutting into other public services.
The Senate budget requires school districts to come up with $124.2 million in additional savings, an amount that State Board of Education Chairman Bill Harrison said will harm classrooms, particularly because it comes after two years of similar funding cuts.
The budget also cuts funds in a variety of other areas, including new textbooks, instructional supplies, instructional support (guidance counselors, social workers and media specialists), other personnel (janitors, clerical staff), central office staff, staff development, the Dropout Prevention Program and the More at Four pre-K program.
Republicans in the N.C. Senate said cuts are needed across the state budget to close a $2.5 billion deficit, but they note the budget includes some spending increases for education. The Senate-backed spending plan includes $61.7 million to reduce class sizes by hiring 1,124 more grade-school teachers across the state. The Senate budget also adds five days to the school calendar and spends $200,000 to study literacy programs in third grade and ways to reduce remedial education at university and community college campuses.
The budget approved by the Senate provides funding for project enrollment growth at community colleges and the University of North Carolina system. However, the budget also requires colleges to find additional savings at their discretion. The community college system must find $50.8 million in additional savings, while the university system must come up with savings of 414 million.
Mitsubishi Nuclear Systems plans to invest $4.1 million and hire 135 engineers and other employees as it establishes its engineering center in Charlotte. The company said the move is needed to meet “the growing needs of our U.S. utility customers for safe and efficient nuclear power plant technology.”
U.S. Senator Kay Hagan (D-N.C.) said the engineering center will work with UNC Charlotte to expand clean-energy technology for utilities in the United States. She said Mitsubishi’s decision to locate the center in Charlotte makes sense given the city’s reputation as “a premier business and clean-energy hub.”
North Carolina will provide as much as $2.8 million in incentives if Mitsubishi attains the job creation and investment targets.
After previously rejecting a controversial economic incentives package for Amazon, the S.C. General Assembly has approved a tax collection exemption for a large Amazon distribution center near Columbia, S.C. The center, expected to begin operation in late 2013, will create about 2,000 jobs, according to Amazon, which also said it may be interested in establishing facilities in other areas of the state, including Spartanburg.
State legislators rejected the tax collection exemption in a vote on April 27 after Republican Governor Nikki Haley, along with Tea Party members and other conservative groups, voiced disapproval. Haley said the incentive, which gives Amazon a five-year exemption from collecting sales taxes on purchases by South Carolina residents, would create an unleveled playing field for retailers in the state. She also said it created an unfavorable precedent for attracting future businesses.
However, business leaders and citizens urged the General Assembly to reconsider, particularly after Amazon stopped work on the new distribution center following the April 27 vote. Some state officials said other companies were declining to consider South Carolina after the state rejected Amazon’s incentives package. The S.C. Senate approved the incentive package for Amazon last week, and this week the S.C. House approved the measure by a vote of 90-14. Haley has said she plans to let the measure take effect without her approval.
Work on the new $125 million distribution center, the largest development in the Midlands in recent years, is expected to resume once the tax break is made official.
Lockheed Martin announced it plans to lay off 300 workers at its facility in Greenville, S.C. The aircraft maintenance plans currently has about 1,100 workers. The company said the decision to lay off workers was made after the U.S. Navy awarded a federal contract for maintenance repairs and overhaul work on P-3 Orion aircraft to L-3 Communications in Wako, Texas, rather than Lockheed. However, Lockheed said the Greenville, S.C., facility has other significant contracts with the U.S. Navy, U.S. Air Force, Customs and Border Protection and international agencies, and it will remain an important part of the aeronautics company’s operations.
The North Carolina Shakespeare Festival has canceled its main fall season for the first time in its 34-year history. The festival is expected to lose more than $200,000 in funding from the state government, based on spending plans proposed by the legislature. Pedro Silva, managing director for the festival, said it appears the cuts will be permanent.
The festival has received about $250,000 a year from the state over the past decade, providing nearly one quarter of its annual $1.1 million budget. In each of the past two years, the festival held only one main season play because of declining revenue. Despite the expected $200,000 funding cut this year, Silva said the Shakespeare festival plans to continue other programs, such as workshops and summer educational camps. The festival organizers, he said, also plan to look at ways they can move ahead with a new, improved Shakespeare festival for the future.
The 14th Annual Black Mountain Arts & Crafts Show will be held this weekend. The event, from 10 a.m. – 6 p.m. on Saturday and from 10 a.m. – 5 p.m. on Sunday, takes place next to the Old Depot on Sutton Avenue in Black Mountain. The show, designed to promote the highest quality of arts and crafts, features more than 65 juried crafters and artists. The event is free to the public and includes food and drinks.
Wal-Mart planned to launch this week a new online shopping program for stores Spartanburg and other areas of the country. The Pick Up Today program will let customers browse inventory at an individual store, purchase items and then pick them up the same day. The service, available at no cost, can be used for shopping at the Wal-Mart stores at 141 Dorman Centre Drive, 2151 E. Main Street and 4000 Highway 9 in Boiling Springs.
QuickTrip Corp. announced plans to open convenience stores in the Spartanburg area later this year. The Oklahoma-based company said it will open four stores in Spartanburg County by early next year and plans to open additional stores later in the region. The first QT gasoline and convenience store is expected to off Highway 9 at exit 75 of I-85. QuickTrip, which has been listed on Forbes “Best 100 Companies to Work For” list several times, said it has “fallen in love with the Upstate,” and is very excited about its move to South Carolina.
“The Hunger Games,” a movie starring Oscar nominee Jennifer Lawrence, Stanley Tucci, Woody Harrelson, Liam Hemsworth and Josh Hutcherson, is expected to begin shooting in Asheville this month. The filming is expected to take place at the North Fork Reservoir and other locations around the city between June 20 to June 30, according to
Filming of the movie, based on the post-apocalyptic novel by Suzanne Collins, previously took place in Burke County and around Shelby.
The movie, which reportedly has a budget of about $75 million, is considered one of the largest movies ever filmed in Western North Carolina. Other movies filmed in the region in the past include “The Last of the Mohicans,” “Patch Adams,” Bull Durham” and “Nell.”
“The Hunger Games” is directed by Gary Ross, who also directed “Sea Biscuit” and “Pleasantville.”

Sign up for our daily email newsletter

Get the latest news sent to your inbox