09/22/04 — Analyst sees more problems for manufacturing sector

View Archive

Analyst sees more problems for manufacturing sector

By Sam Atkins
Published in News on September 22, 2004 2:00 PM

MOUNT OLIVE -- A recession in manufacturing continues to hurt North Carolina's economy, and investing money to train laid-off workers for new jobs is crucial, a state official says.

Dan Gerlach, state senior policy adviser for fiscal affairs, discussed the state's economic outlook today at the Lois K. Murphy Regional Center at Mount Olive College. The event was part of the Business Breakfast Briefing series sponsored by the college's School of Business.

He said the manufacturing industry is declining, resulting in fewer workers. Free-trade agreements, including textile trades with Pakistan, have damaged it further.

North Carolina is a heavy manufacturing state and has been affected more than other states. Something must slow down this decline because when the industry is lost, employment is lost and so are big property-tax payers, said Gerlach.

The state has seen a growth in the services industry, which includes education, health care, and business and professional services. The problem is many people have been in the textile industry for years and are now at age 40 or 50. They are not trained in the services area, and when they lose their manufacturing jobs, they are not getting the services jobs available, he said.

Gerlach said the overall business climate in the state is good, but there are three main threats to business: higher oil prices, the high cost of construction products like concrete and steel, and high health care costs. He does not see the prices of construction products going down anytime soon.

The keys for eastern North Carolina include the military and Global TransPark. He said this area is so dependent on the military, and for that reason, he feels that the state's bases are at a low risk of being closed.

He said the state continues to do things to ensure the bases are protected, including buying land around them to reduce development that could harm the bases and helping with tuition for military personnel at community colleges.

He said the Global TransPark is a world-class facility, and the government is going to continue to invest in it. He believes something will happen there soon, which will create more jobs.

Business recruitment, creating an environment that is conducive for people to start up a business and having the best-educated workforce in America are also important.

Data show that more people are going to college than ever before, and the state is ranked in the top seven in the country in reading, math, writing and science.

"We see progress in the right direction," he said.

On the other hand, there is a problem with keeping students in high school. He said a lottery would help stabilize investments in the school system and help prevent dropouts.