Region's leaders wary, but hopeful, about North Carolina economy
By Steve Herring
Published in News on January 27, 2009 2:02 PM
KINSTON -- If economic misery loves company then North Carolina's Eastern Region isn't alone.
But the misery is not as bad here as it is in other regions, several speakers at a Monday conference at Lenoir Community College said. Nor is it as bad here as it has been in the past, they noted.
The speakers at the conference on the economic state of the 13-county region spared no one's feelings as they outlined the economic challenges faced by not only eastern North Carolina, but the rest of the state and nation as well.
"We will have to work together," said Dr. Rick Niswander, dean of the College of Business at East Carolina University. "We will fail if we don't.
"The economic world is not coming to an end. Don't hyperventilate, keep things in perspective and turn off the screaming heads on television."
He and other business and government leaders said that while the worst of the current economic crisis may not have arrived yet, it is still time to prepare for the day when the economy will take a turn for the better. And they emphasized that the current hard times can be weathered by an aggressive, organized and unified region.
Niswander, as did several other speakers, said that an increased military presence in the region as well as other assets like the area's colleges and community colleges and the development of the biotechnology and aeronautics industries remain bright spots.
What happens in eastern North Carolina greatly depends on what happens on the national and state levels, Niswander said during the annual conference sponsored by the Eastern Region, a rural economic development organization representing 13 counties that include Wayne and Duplin.
Niswander said that people need to keep the current economic crisis in perspective. While certainly not a good thing, it is not as bad as in the past, particularly the economic woes of the early 1970s and 1987.
He said events over the past several months have sent Treasury bills to a never-before-seen low. The market is experiencing caution bordering on "paranoia," he said.
North Carolina has escaped the bursting housing bubble that has devastated others states -- particularly California and Arizona. The reason, he said, is that North Carolina is among some 34 states in which housing has been "about flat." Nevertheless, the housing market is "a drag on the economy," he said.
Niswander said that people tend to "hyperventilate" about the half million people who have lost their jobs. Niswander said he was "not trying to make light of it," but that people forget there are 143 million people who are employed.
Niswander said he expects to see the unemployment rate continue to rise, possibly reaching double figures in some places.
"It (unemployment) is not great today, but it is not as bad as it has been," Niswander said.
In the early 1980's unemployment exceeded 7.5 percent for more than six years, he pointed out. In addition, there have been five periods since the 1950's during which unemployment reached more than 7.2 percent.
The current recession, he said, probably will last until at least late this year and energy prices should remain modest during that time.
Several mitigating factors have softened the economic hard times in the region, he said. An increased military presence, a net population increase, a housing market not hit as hard as other areas, and diversity of employment have helped the eastern part of the state, Niswander said.
Newly-appointed state Secretary of Commerce Keith Crisco said Gov. Beverly Perdue understands the critical role of educating people for the type of jobs that will be available in the future. And the state has to become a leader in the global economic marketplace, Crisco said.
He described his own experience as a textile manufacturer.
"We adapted to the global environment. When others avoided it, we embraced it and adapted to it," he said. Other businesses must the same to survive, he said.
"We are competing with China whether we like it or not, and we have got to take advantage of the interest that they have in U.S. products," Crisco said.
The commerce department has made a number of changes to help the state's businesses, he said. One has been to turn the director of tourism office into an assistant secretary role.
"We simply must do a better and more complete job of marketing to the nation and other areas," Crisco said.
A new Internet portal has been launched for quick, and in most cases, free and fast information about the state and its agencies.
"Despite the financial gloom, I can tell you that our developers are busy," he said. "It is fair to say we do have jobs going out the back door and the challenge is to bring them in the front door. The good news is we are bringing them in."
The military's economic impact also is crucial and the state has to use it strong military presence to create jobs, he added.
Crisco said Gov. Perdue plans to continue to be aggressive in the pursuit of businesses despite the immediate budget crunch in Raleigh.
"The governor understands that economic development does require some money. While I can't tell you we won't be immune to budget cuts, if we have a prospect we will go after them."
Those efforts will continue to include incentives, he said, and a key to those incentives will be flexibility.
The public may see some changes to the incentives, but they continue to be critical and should not be sacrificed, he said.
Rep. William Wainwright, the speaker pro tempore of the state House, said a study has suggested the state look at how it attracts new industry and retains jobs through incentives.
"I expect to see changes in the mix of programs and incentives we have now," Wainwright said.
"The coming year will present challenges the depth and breath of which we have not had to face in two decades."
However, even with its problems, North Carolina is in better shape than most other states, he said.
"The region still has the potential to grab opportunities, weather the financial storm and come out ahead of where we were when the recovery occurs," Wainwright said. "In order to do this the region must work together and focus on high impact priority projects."
Regional projects are more likely to receive federal funding, as well as ones that require a mix of local, state and federal dollars, he noted.
Scott Ralls, president of the state's community college system, emphasized how important the community college system is to training workers for new jobs.
"This is not the first recession, but is the first one that when we come out of it, it will truly be in a global market," he said. "The competition we face when we come out of this will be much different. The solution comes back to education."
"We wonder how deep the swamp is," said Bill Naumann, chairman of the Chambers of Commerce North Carolina's Eastern Region. "This not the time for the faint of heart, courage is definitely in order. We need to sustain cooperative efforts. We need new models to deal with the current situation. The old tricks don't work and remember we can do so much more together than we can apart."
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