The Stanly News and Press (Albemarle, NC)

Opinion & Letters to the Editor

May 1, 2014

So exactly where is the growth?

Thursday, May 1, 2014 — Economists love numbers – some might call it an occupational hazard. Numbers are our window into the workings of the economy. Without numbers, we’d have a difficult time understanding how the economy is changing, both in positive and negative ways.

But all economic numbers aren’t created equally. For example, many of the economic statistics released monthly — such as the job numbers – are based on statistical samples. This means they are not 100 percent counts. Anytime a sample is used, the number will be an estimate, not a certainty.

So when a census — which is as close to 100 percent count as we get — is released, the excitement level of economists rises. This was the case recently when the first numbers came out from the 2012 Economic Census.

The Economic Census is done every five years and is, in the words of the U.S. Census Bureau, the “official five-year measure of American businesses.” Information is collected from 4 million businesses, which is more than half of all business operations in the country. Data about what the business produces, how much the business produces, the number of workers employed and what those workers are paid are among the items published from the Census. The just-released 2012 numbers are for the country. Beginning next year we’ll have individual state information. So, for now, we’re limited to looking at national trends.

Comparing the 2012 Census numbers to the previous 2007 Census numbers is important for one major reason: The year 2007 was the last year before the start of the Great Recession, whereas 2012 was a year in which the economy was recovering from the Great Recession.  Therefore, comparing the two years allows us to study the impact of some changes that occurred as a result of that extraordinary downturn.

So what are some of the key insights about our economy from the 2012 Economic Census? Let’s begin with one of the hottest — and sometimes controversial — economic sectors: energy. Energy discovery and extraction has boomed in the last five years. The value of production is up one-third, employment is up one-fourth to almost 1 million workers, and payroll has risen by 50 percent. Clearly this sector is booming.

Two other big growth sectors have been education and healthcare. Together the two giants employed almost 2 million more workers in 2012 than in 2007, and the number of firms jumped by 60,000. With the country’s added focus on education and our growing elderly population, growth should continue in these people-driven businesses.

The information sector — including publishing, broadcasting, entertainment production, telecommunications and data processing — displayed some interesting trends in the five years between 2007 and 2012. The values of both output and payroll rose by 15 percent, but the number of information firms, as well as employment, slid. This economic sector is clearly in a state of flux: Consolidation is occurring. Also changing are who produces programming and how programming is delivered to customers. So there are likely to be winners and losers in the information sector in the years ahead.

Both retail and wholesale trade also appear to be transforming. These are huge sectors employing more than 20 million people nationwide, but the number of workers actually dropped between 2007 and 2012, even while sales were increasing. Information technology is likely impacting retail and wholesale trade firms, with such technology replacing some workers. The shift to more online buying is also affecting job opportunities in these firms.

The finance and real estate sectors were still smaller — especially in jobs — in 2012 than in 2007. Of course, these sectors were hit hard by the housing crash, and they have not yet fully recovered.

Now what about manufacturing? Manufacturing is still a vital part of our economy, accounting for 10 percent of all economic activity in the nation and 20 percent in our state. The value of manufacturing production actually rose between 2007 and 2012 — by a healthy 8 percent. But there were more than 30,000 fewer manufacturing businesses in 2012 than five years earlier, and jobs were down by more than 2 million. Manufacturing is continuing its trend of using more machines and technology and fewer workers in its production. Also, many manufacturing firms simply didn’t survive the recession.

There were also big shifts within manufacturing. Important for North Carolina, textiles, apparel and furniture all retreated on every measure — number of firms, value of output, payroll and employment — between 2007 and 2012. In contrast, food, chemical, machinery and transportation equipment manufacturing gained in value of output — although not in numbers of workers. This says that even for manufacturing firms that are making and selling more, employment opportunities may be sparse.

To me there are three big “take-aways” from all these 2012 Economic Census numbers. First, business made some gains between 2007 and 2012, despite the horrific recession. Second, our economy is — as it always has been — in a state of change and transformation: Some businesses are expanding while others are shrinking. Third, output and jobs don’t necessarily go together.   With the increasing use of machinery and advanced technology, more of our economy can run without workers.  

So, based on these new numbers describing our economy, are there more sunny or cloudy economic days ahead? You decide.

Mike Walden is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy.


Text Only
Opinion & Letters to the Editor
  • Patrick Gannon Fake news or sign of some more trouble?

    RALEIGH – Of the three situations I can recall where agencies receiving large sums of taxpayer dollars wouldn’t divulge employees’ salaries, two of them ended badly. The third – involving a group of charter schools in Southeastern North Carolina – is playing out right now.

    July 25, 2014 1 Photo

  • Almost half of America's obese youth don't know they're obese

    WASHINGTON - The good news is that after decades of furious growth, obesity rates finally seem to be leveling off in the U.S.. The bad news is that America's youth still appear to be dangerously unaware of the problem.

    July 23, 2014

  • Darth Vader is polling higher than all potential 2016 presidential candidates

    On the other hand, with a net favorability of -8, Jar Jar is considerably more popular than the U.S. Congress, which currently enjoys a net favorability rating of -65.

    July 23, 2014

  • D.G. Martin Where did all these new voters in North Carolina come from?

    “Voters born elsewhere make up nearly half of N.C. electorate.”
    So begins the latest DataNet report from the UNC Program on Public Life, directed by former journalist Ferrel Guillory.

    July 23, 2014 1 Photo

  • Patrick Gannon Some light for Dems in their time of darkness

    RALEIGH – Earlier this year, state Sen. Ben Clark, a Hoke County Democrat, became a hero for a day among his party and environmentalists when his amendment to require more well water testing near future fracking sites passed the Senate. It even gained the support of a number of GOP senators, against the wishes of the Republican bill sponsor.

    July 23, 2014 1 Photo

  • mama.jpg What we get wrong about millennials living at home

    If the media is to be believed, America is facing a major crisis. "Kids," some age 25, 26, or even 30 years old, are living out of their childhood bedrooms and basements at alarmingly high numbers. The hand-wringing overlooks one problem: It's all overblown.

    July 22, 2014 1 Photo

  • Doug Creamer Maintaining hope

    Gardeners are facing challenges with the weather this year. It seemed like we were getting great conditions in April and May. The weather was warm and we were getting some good rains. Then sometime in June the rain stopped. It got so dry that I didn’t have to cut the grass. While I enjoyed the break, the garden was not happy at all. I was having to water quite a bit to keep the vegetable garden alive and growing.

    July 22, 2014 1 Photo

  • Jason O. Boyd I may be a bit behind the times, but at least I can find ‘America’

    I seem to be reading about and dealing with technology a lot lately.
    I  love technology and have always been fascinated by gadgets of all kinds and the wonderful things they can do. You never seem to go through an entire day without some form of invention enhancing your life.

    July 21, 2014 1 Photo

  • Brent Laurenz Meeting out in open helps negotiations move ahead

    RALEIGH – State lawmakers reconvened in Raleigh on May 14 promising a brief legislative session this summer, but as July moves along they are still in town and tackling big issues.

    July 21, 2014 1 Photo

  • Larry's Sketch 7.16.14.tif They don’t give a darn for Duke University

    John “Duke” Wayne’s heirs are suing Duke University over trademark rights.

    July 21, 2014 1 Photo

House Ads
Seasonal Content