Truth delivered daily
Carolina Public Press is committed to ethical, nonpartisan reporting on the important issues facing our communities. Make us your source for trusted news in North Carolina.
With national experts continuing to tally the recent government shutdown’s impact on the economy, that analysis can often be telling of local trends.
Nationally, public confidence in the economy dropped nine points in October to 71.2 according to the Consumer Confidence Index; this drop is largely a result of the government shutdown earlier in the month. October’s significant decline in optimism about the economy was preceded by a 2.1 point drop in September to 80.2. In its accompanying analysis, the Conference Board elaborated on the September decline by citing the resurfacing of “concerns about the short-term outlook for both jobs and earnings.”
Scott Hamilton, CEO of AdvantageWest, said the government shutdown brought lots of questions with it. AdvantageWest is an economic development group that covers the 23 western counties of the state.
“I don’t know if it was harmful in a statistical sense,” he said, “but I can tell you that it provided a level of uncertainty to people.”
Experts are still determining the shutdown’s impact on the region, which, Hamilton noted, contains a range of economic climates.
Measuring local economic trends, the August 2013 Western North Carolina Economic Index and Report was released last month by the Center for Economic Research and Policy Analysis at Appalachian State University. The local report showed that, as of August, the seventh consecutive monthly gain in economic activity within the 25 Western North Carolina counties.
Distinguishing between rural and metro areas, the report cited a 9.3 percent unemployment rate in rural counties compared to a 6.3 percent unemployment rate in the Asheville metro.
“In some areas we’re seeing economic growth at a faster pace than we are in other areas of the region,” Hamilton said. “I think some of that is driven by population trends and the metro centers, the Asheville area obviously being the metro of the region. Having the I-26 and I-40 interstates bisect in Asheville provides for a great opportunity for growth in and around [Asheville] and within that labor shed.”
Hamilton also said that some of the rural communities were hit harder by the recent recession: “It’s going to take longer for those economies to come back around. Opportunities for job growth are not as significant… You’re going to have more employers in the metro areas then you are going to have in the smaller areas.”
But job growth is a statistical indicator that shows Asheville’s variance from both state and national trends.
Employment figures from FDIC and the U.S. Bureau of Labor Statistics reveal that in the first quarter of 2013, the Asheville metro area’s employment growth was 2.2 percent higher than the national average. This gap narrowed in the second quarter to a 1.6 percent difference.
The rise in jobs is in contrast to the overall sentiment of residents, who often question in which sector is this job growth occurring.
Additional data sets from FDIC and BLS show that the ongoing push for regional tourism is producing results. Employment in the leisure and hospitality sector grew 8.9 percent in the 12 months ending the 2nd quarter of 2013.
“Since the recession, hospitality has been the fastest growing source of jobs,” said Stephanie Brown, executive director of the Asheville Convention and Visitors Bureau.
“We tend to think of visitor spending just supporting front-line jobs,” she said, “but we’re also supporting a lot of lawyers, and bankers, and insurance brokers and designers.
“It’s more far-reaching in our community than people understand.”
Tourism jobs are growing, and positioning the area to attract visitor spending has both direct economic impact and an indirect reach throughout the community. But many researchers note that tourism related jobs that are created are low-wage jobs in the food services and lodging industries, which is detailed in a 2011 study produced by the Journal of Travel Research.
Not only is tourism growing overall, but specialty tourism such “beer tourism” is a unique local niche.
“The craft beer industry has exploded, especially over the last 10 years, but it’s been a developing trend over the last 20 years,” said Hilton Swing, proprietor of the start-up company Asheville Ale Trail. “It’s similar, in a lot of ways, to the wine industry 20 to 30 years ago.”
“We’re starting to see beer tourism become a popular thing,” he said, “but we’re really right at the very beginning of beer tourism as its own niche or industry.”
Swing’s approach is to broaden the experience for the visitors who are already coming to the region and connecting these visitors to the area’s beer culture. As the region’s growing beer industry gets noticed by consumers, it has also attracted large-scale beer manufacturers. Sierra Nevada, New Belgium and Oskar Blues have all decided to put down roots in the region.
Named Small Business of the Year in 2008 by the Asheville Chamber of Commerce, Highland Brewing Company was started in 1994 by Oscar Wong. While establishing the first legal brewery in Asheville, Wong has seen both the industry and the town develop.
He said that “business is riskier in Asheville due to the state of the economy” and what he called its many “opposing elements.” Wong said that reduced employment opportunities from existing companies may prompt entrepreneurs to pursue their “latent passion.”
Of course, this is not an easy road.
“The entrepreneurial spirit in the U.S. is alive and well,” he said, “but it becomes more difficult every day to start a business. This is due to excessive regulations spawned by uneven application of existing rules and a few notorious rogue elements. Rules inevitably lead to more rules, and I would say that it is impossible to run a business without technically at odds with some obscure rule or the other.”
But the growth of Asheville’s tourism and beer industries may not address the areas of economic hardship within the rural parts of the region. With unemployment in rural WNC being three points higher than the Asheville area, the lack of jobs is only one factor that challenges the rural parts of the region.
Philip Belcher, vice president of programs at The Community Foundation of Western North Carolina, said that that there are “substantial needs” in the foundation’s primary grant-making areas: people in need, early childhood development, food and farming and preserving natural and cultural resources.
“Not only recent economic turmoil and the lingering recession, but also N.C. state government funding decisions, have made conditions more challenging in all of these areas,” said Belcher in an email. “It is in our work with people in need, however, that we see the most immediate effects.”