After 113 months of uninterrupted growth, the economic boom that has propelled Charlotte from a regional power to a global economic hub over the past decade is over, struck down by the new coronavirus.
That’s the conclusion of a new report from the Charlotte Regional Business Alliance, released Monday. The group, which is the leading advocate for businesses in the Charlotte area, estimates the area lost 71,000 jobs in the first quarter of the year. This represents about 4.8% of the total employment in the region.
âThis quarter everything has changed,â wrote Chuck McShane, senior vice president of group economic research and author of the report. The report was released at the group’s quarterly investor meeting, which was held virtually for the first time this year. âGrowth came to a screeching halt in mid-March as the effects of COVID-19 began to trickle down to the economy,â he said.
Hotels have seen their bookings plummet as conferences and travel are reduced. Restaurant reservations went missing as state dining halls were closed by order of Governor Roy Cooper.
Until a plan is developed to reopen the economy, the extent and scale of the economic devastation is unknown. Every week without income expands more and more businesses, and every week more of them are reaching their limit.
“It has been astounding,” Richmond Federal Reserve Chairman Tom Barkin said at a conference last Thursday. “It’s going so fast that the data we’re getting is almost already out of date.”
The economy has derailed
This is a difficult turning point for Charlotte, which has seen its growth surpass that of the national economy for most of the past decade.
Relocations and business expansions had become regular occurrences, greased by easily obtained tax breaks and incentives from city, county and state. Population growth followed.
Before the pandemic hit North Carolina, it was shaping up to be another great quarter for the region’s economy.
Paper maker Glatfelter has announced that it will move its headquarters to Charlotte. General Motors has planned a new racing research and development facility in Cabarrus County. Businesses in the commercial sector have announced investments of $ 323 million in the region.
But now the business cycle has turned. Much of the economy is simply turned off. And the Alliance report will likely only be the beginning of ugly data on the state of the region’s economy.
âAny numbers we’re going to hear this quarter, this month or next month, are going to be really bad,â said Michael Walden, professor of economics at North Carolina State University.
The economic relief for businesses and workers, intended to ease the pain of the recession, has been marred by technical problems, incomplete coverage and limited capacity.
More than 670,000 North Carolina residents have applied for unemployment benefits since March 15, and many have reported difficulty simply filing their claims, let alone receiving benefits.
Loan funds, designed to provide bridge financing to local businesses, ran out of cash almost immediately, teeming with demand. A $ 15 million Golden LEAF Foundation Pandemic Emergency Relief Loan Fund has been quickly exhausted.
The federal paycheck protection program, a $ 349 billion stimulus package designed for small businesses, ran out of funds within weeks. Lawmakers are now debating proposals to replenish the program with hundreds of billions more in relief.
North Carolina companies have secured $ 8 billion in funds, enough to cover 53% of eligible payrolls in the state, according to data from Bloomberg News. This rate was 39th out of 50 states plus the District of Columbia.
Meanwhile, conservative activists and business owners are calling on authorities to reopen the state’s economy. Their complaints fall on deaf ears in Raleigh as most public health officials agree the risk to people’s lives is too high to open many businesses.
As of Monday, Mecklenburg County had 1,183 confirmed cases of COVID-19, the disease caused by the novel coronavirus. And 29 people have died from the disease in the county. More than 6,000 in North Carolina have tested positive for COVID-19.
With officials still working on a backlog of tests, the full extent of the virus in the state is not known. The economic data also has a built-in lag, meaning the full impact of the pandemic on businesses in the region will not be known for some time.
âIt will be months before the true economic impacts of this shutdown of the US economy are known,â McShane wrote.
The report predicts that Charlotte will be less affected than many other parts of the country.
Generally, finance has not been badly affected by the virus, with Wells Fargo and Bank of America pledging not to fire people during the pandemic. Logistics companies, such as warehouses and transport companies, are also expected to be less affected by the slowdown.
One point of optimism that McShane found was in the job postings. Full-time job postings were down 3.4% for the Charlotte area at the end of March, compared to the same quarter last year. That’s well ahead of a nationwide drop in full-time job vacancies of 21%.
Despite the openings, the time needed to fill positions has increased for both technology and manufacturing, indicating a possible hiring freeze.
This story was originally published April 20, 2020 4:00 p.m.