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 |
|