The region’s economy gets high marks in some areas but shows room for improvement in others, including a lack of large businesses that produce goods and services to be sold elsewhere, officials said Tuesday as they presented the first Wilmington Regional Economic Scorecard.
“As relates to employment and economic growth, we are improving in overall terms; our local economy is growing,” said Hal Kitchin, a Wilmington attorney, chairman of Cape Fear Future and member of the Regional Economic Scorecard Task Team. “But when we look at that economic growth on a per capita basis – and take into account the fact that people continue to move here, which is without a doubt a good thing – we see that our economic growth is a bit flat. Put it another way, we’re growing our local economy at about the same speed that we’re adding people.”
The scorecard, presented by Kitchin and others Tuesday morning at the Wilmington Convention Center to a group that included many business and community leaders, was produced by Cape Fear Future, an initiative of the Wilmington Chamber of Commerce. The measurement will be published annually.
Among this year’s results: While Wilmington and surrounding communities rank high for having a well-educated population, an entrepreneur-friendly environment, and a high quality of place, the region scores lower than its peer cities on the scorecard’s traded sector employment index, a measure of employment by businesses whose products are sold outside of the area.
“We’re always losing some income or wealth to other communities as we travel, as we order things off of Amazon, as we send birthday cards with $20 bills in them to our nephews – that’s money that’s leaving the community,” explained Adam Jones, a regional economist at the University of North Carolina Wilmington and another member of the scorecard task team.
And that’s normal for all communities, Jones said, mentioning the proverbial water bucket with holes. Jones said questions arise when it’s time to refill that bucket – something more traded sector activity can ensure.
But the Wilmington region ranks much lower on the index than the nation and other cities – at 62 when the national average is set at 100, with only Myrtle Beach, South Carolina, and Pensacola, Florida, ranking lower among the peer cities the scorecard also measures. Other peer cities the scorecard uses for comparison are Asheville; Savannah, Georgia; Mobile, Alabama; Roanoke, Virginia; and Chattanooga, Tennessee. Charleston, South Carolina, and Raleigh were chosen as "aspirational" cities for the purposes of the scorecard.
That 62 score reflects a 10-point loss since 2010. In the Wilmington Region, made up of New Hanover, Brunswick and Pender counties, the traded sector provided more than 27,000 jobs but decreased by almost 14 percent from 2010 to 2013, according to the scorecard.
“What this tells us I think is that we need to keep looking at ways to create either the production of goods or the provision of services here in Wilmington that are bought by people outside of Wilmington,” Kitchin said. “It’s a pretty simple concept, a little harder to figure out exactly how to pull it off. But it’s something that I think we’ll keep track of as we go forward.”
Hansen Matthews, partner in Wilmington-based commercial real estate firm Maus, Warwick, Matthews & Co., pointed to one area of concern that he and other brokers say is a barrier to bringing in new traded sector employment.
“The facts presented by Cape Fear Future at the Chamber’s meeting today should be nothing less than an immediate call to action by Wilmington’s business community with regard to rewriting New Hanover County’s special use permit process for new industrial development. Due largely to the county’s SUP public hearing requirements, most industrial relocation consultants are crossing us off of their lists from the get-go,” Matthews said in an email after the event.
Some of the contrasts between measurements in the scorecard were notably sharp, some attendees, including Matthews, said.
“The data is clear. Of the nine cities in the study, Wilmington was in the bottom third for Traded Sector (large employer) employment while being second only to Raleigh in the Human Capital (talent of our workforce) Index. Moreover, we are in the top third of the Innovative Activity Index, Entrepreneurial Environment Index, and the Quality of Place Index. Finally, we ranked number one in air quality while our employment rate finished in the middle of the pack,” Matthews wrote. “We will continue to fight an uphill battle to create good paying jobs until the SUP issue is corrected.”
The scorecard itself does not mention the SUP. It does say, "A strong traded sector provides two advantages to a region: a flow of income from the outside increasing wealth, and jobs that typically pay more than those in the local sector."
Wilmington region’s entrepreneurial environment index ranking, the scorecard says, “is likely cause for both celebration and concern. While there is clearly a growing and desirable base of entrepreneurial activity with the ability to grow into larger businesses providing well-paying jobs, too many of our area's entrepreneurial ventures are service-based, will never grow beyond a handful of employees and don’t add significantly to the tax base.”
Another concern is that one of the indicators in the entrepreneurial environment index, the percentage of business services available, lags behind all peer cities except for Asheville and Myrtle Beach.
That’s largely a reflection, Jones said, of the fact that a lot of the businesses in the region are small businesses. “We have not yet developed a demand for a large business services sector,” he said.
Audience member Jason Wheeler asked about the impact of affordable housing, which was the topic of a Mayors Roundtable Discussion on Housing Affordability held last week, on the traded sector employment index data.
“We want to keep doing this so we’re going to add new matrices, new indicators next year, the year after. We want to improve this and make it better every year. That may be one of the things we want to include in next year’s report,” said Chris Boney, principal and architect at LS3P and chairman of the Wilmington Chamber of Commerce and a member of the Cape Fear Future Board of Directors.
Officials stressed the use of the scorecard as a baseline and a way to measure progress.
“You’ve got to understand the data to know which way you want to move forward,” Boney said at the beginning of Tuesday's event.
A printed copy of the 16-page scorecard is available at the Wilmington Chamber of Commerce and will be included in the print edition of the Greater Wilmington Business Journal that comes out Friday. An electronic copy will be available on the chamber's website soon, officials said.