EconWar



The News & Observer


Raleigh, N.C.


February 15, 1996

Triangle job growth ranks high
Nationally, region behind only Tucson

Steven Eisenstadt, Staff Writer

Copyright © 1996, The News & Observer

This is one race where the Triangle won't mind second place.

The region - already widely regarded as the picture of economic health - is expected to generate jobs at a faster clip than every other metro area except Tucson, Ariz., over the next two years, an influential forecaster says.

The Triangle will see an annual 3.3 percent increase in new jobs, compared with 2.3 percent for the entire Southeast and 1.7 percent nationally, according to DRI/McGraw-Hill, an economic consulting firm in Lexington, Mass.

Credit the Triangle's flourishing high-tech industry for the strong showing, the company says, as well as a predicted slowdown in job creation throughout the rest of the country.

In fact, the Triangle is not immune from that cooling off: The region's annual job growth rate during the past two years - 3.6 percent - was a bit higher than the 3.3 percent increase predicted for the next two.

But with growth elsewhere expected to be sluggish, the Triangle should jump in the new-job rankings from third to first in the Southeast, and from 23rd to second nationally.

And when factory jobs are excluded, the Raleigh-Durham-Chapel Hill area will rank No. 1 over the next two years. The region currently has 550,000 jobs.

"Much of the job growth will be concentrated in the computer software and the environmental technology industries, as evidenced by firm expansions and relocations to the area," says a DRI/McGraw-Hill study to be released next week.

Tucson edged out the Triangle for first place nationally with a projected increase of 3.4 percent, thanks to its growing role as a staging area for trade with Mexico and population growth that is fueling a boom in retail and other service industries.

The DRI/McGraw Hill study is considered an important bellwether of employment trends because hundreds of business planners use it to plot investment, marketing and corporate location strategies.

"They do a fairly detailed analysis of the large metro areas. It's not a PR production," said Mike Kiltie, chief economist in the state budget office. "So it's good news that they ranked this area as high as they did."

Sara Johnson, chief regional economist for DRI/McGraw Hill, said the Triangle will continue to prosper because of the area's large corporate high-tech community. Computer and other high-tech companies account for 10 percent of the region's jobs, placing the Triangle seventh nationally in the forecasting firm's measure of high-tech concentration.

But it's not just long-established heavyweights such as IBM that are generating more jobs, Johnson said. It's also the scores of smaller, entrepreneurial software companies drawn to the region by its three major universities and lower cost of living compared to other high-tech meccas such as California's Silicon Valley.

"The software industry is growing exponentially, and a lot of the companies tend to be smaller companies that are growing very quickly," Johnson said.

An example is Virtus Corp. in Cary, which sells software for generating 3-D graphics used by architects, interior designers and film directors. The company started out six years ago with five employees. It now has 52 and will soon move from its cramped, 9,000-square-foot office on MacKenan Drive to one down the street that's nearly three times larger.

"This area is getting known for some pretty hot start-up companies," said David Smith, company president and chief executive officer. "I think that means we'll see more venture capital flowing here, which is what's needed to really keep this thing growing."

Other North Carolina metro areas didn't fare as well as the Triangle in the study. The job-growth rate in Charlotte is expected to rise 2.2 percent, third in the Southeast and 31st nationally. Greensboro, ranked 11th in the Southeast and 62nd in the country, is more vulnerable to economic downturns because of its heavier dependence on manufacturing, the study says.

One problem for the Triangle cited in the study: Although retailers are flocking to the area, service-sector wages here are too low to attract enough workers to fill the jobs. "This has made hiring a problem for many local companies," the study says, and could end up scaring off new employers.

Struggling to attract quality applicants, some retailers have resorted to offering even part-time workers full benefits packages, said Sherry Burton, spokeswoman for Crabtree Valley mall.

"There isn't necessarily a base of employees to work in service jobs," she said. "That's something we've really been battling."

(Staff writer Su-jin Yim contributed to this report.)



Used with permission.
All rights reserved. No part of this article may be reproduced, translated, or transmitted in any form or by any means without permission in writing from The News & Observer.

Copyright © 1996, The News & Observer.


| Click here to go to The News & Observer homepage. |



| Top | Case Home | Roundtable | Briefings | Guide | Out-Box |