North Carolina’s heavy-fisted response to the coronavirus pandemic has resulted in a delayed economic recovery, reports from state and national economists show.
Things won’t speed up for a while. The latest projections call for relatively high unemployment through next year.
School closures and business restrictions led to an “unprecedented drop in economic activity,” says the N.C. Department of Commerce.
Now, jobs are still more than 5% below where they were before COVID, totaling 241,500 “missing jobs,” as Wells Fargo economists put it. The majority of these are in places like restaurants, bars, hotels, entertainment, fitness, and hair salons — all industries still suffering under emergency restrictions.
“While manufacturing appears to have strong momentum, high-contact areas of the economy will not recover in a meaningful way until the COVID pandemic recedes,” the Wells Fargo economists write.
But there is also evidence North Carolina is a distinct case.
Net job loss in North Carolina is significantly worse than states such as Georgia, Arizona, South Dakota, Tennessee, South Carolina, and Texas, all of which have gained back a much higher percentage of jobs, according to the Bureau of Labor Statistics.
N.C. manufacturers cut nearly 54,000 jobs during the spring 2020 lockdowns, but only hired back a third of them as the economy began to slowly open up.
UNC Charlotte and Barings predict in their latest quarterly forecast that North Carolina will add about 245,000 jobs in 2021, roughly equal to the number lost last year. Unemployment will remain elevated until 2022.
As is often the case, North Carolina’s metro areas are likely to bounce back more quickly. The Charlotte region added some 44,000 jobs in the fourth quarter, a 3.5% growth rate that far outstripped the national average, according to the Charlotte Regional Business Alliance.
Financial services and headquarters office jobs were among the only industries to grow during the pandemic. Still, the Charlotte region had regained just half of the jobs it lost during the first half of 2020 by the end of the year.
Mid-sized metros could be in line for more growth, as well, as warehouse and industrial expansion continues.
“While the year will start off lethargically, we expect the recovery to gain strength over the course of the year,” Wells Fargo economists wrote.
Andrew Dunn is a freelance writer for Carolina Journal.