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2024: A Look Ahead

By Staff Reports, posted Jan 5, 2024
This year, initiatives and government moves that made the headlines last year will continue to have an impact on the business community. (File Photos)

This year promises to be eventful if predictions from local business and government leaders come true.


Getting Around

Many changes across land, air and sea are planned for 2024 in the Wilmington area. 

Grants from the N.C. Department of Transportation are helping the port add rail; the Cape Fear Memorial Bridge repairs will be hard to miss this spring; and getting to the airport could get easier.

In December, NCDOT announced $3.4 million in funding for upgrades to the Port of Wilmington’s rail system. Part of those funds will help construct a new rail storage track this year. This is the first phase of a two-phase project costing about $6 million. Wilmington’s port also has plans to update its rail capacity by breaking ground on an intermodal facility this month.

Environmental and design work is underway to move the port’s North Gate away from Burnett Boulevard to South Front Street. The U.S. Department of Transportation allotted $11 million to the port for the project, and planning and preparation for the move will occur this year.

The port is also due to increase its cold storage capacity this year. In Pender County, shipping company Maersk’s subsidiary Performance Team will open a cold storage warehouse this month. 

In late January, the Cape Fear Memorial Bridge is slated to be closed to inbound traffic. The closures will span several months as the NCDOT and contractor Southern Road & Bridge LLC work to replace the bridge’s deck and support beams that hold up the deck. They aim to complete this work by March 31, before the Azalea Festival, officials said.

Officials overseeing the Cape Fear Memorial Bridge replacement are still trying to find funding for the project. WMPO members will vote to include the option for a toll in bridge replacement plans submitted to the state at the end of the month. 

The Wilmington International Airport will continue its efforts to improve parking, curb and roadway improvements this year. The Airport Boulevard realignment project is planned to begin this year.


Building Up

Even as interest rates climbed, Wilmington’s commercial real estate market saw steady demand and rising prices in 2023.
  
Hansen Matthews, a partner at Maus Warwick Matthews & Company, expects to see more of the same in the new year, with prices continuing to climb.  

“That was the one big surprise that I’ve had this year is that prices have not fallen, even though the interest rate hikes were pretty sharp and sudden,” he said in December. “Any slackening in that demand has been offset by low supply. There is not a lot for sale in this market.” 

Demand is strong for industrial and big-box retail space, Matthews said, and Wilmington’s office market currently has low vacancy rates.   

“We’re lucky that we don’t have a very large, deep office market,” said Hill Rogers, broker-in-charge with Cameron Management.  

Rogers expects higher interest rates from the Federal Reserve for much of 2024. Those rate hikes have made transactions more expensive for buyers and developers, Rogers said.  

That has posed obstacles for some commercial developments. For example, developers of the mixed-use Northern Gateway project ended negotiations with Wilmington leaders this year, citing climbing interest rates and the overall economic environment.  

“You’re going to have to bring in more equity into the transaction to be able to close it,” Rogers said. “A transaction that would make sense a year and a half ago just doesn’t make financial sense anymore for some people.” 

Because the commercial market often reflects the residential market, Rogers said, more people moving to the Cape Fear region is a positive sign for the industry. 

Both Rogers and Matthews see the recent announcement from Epsilon Advanced Materials, an electric vehicle battery materials manufacturer, as an opportunity for the area’s commercial real estate market. The company plans to invest $650 million and create 500 jobs in Brunswick County. 

“If they bring a bunch of satellite suppliers, that’s going to bring a lot of growth. The workers will need places to live,” Rogers said. “So, overall, I think Wilmington is in a good spot."


Job Slowdown

In the last few months of 2023, Wilmington’s job market was showing signs of slowing down.
  
Employers are continuing to add jobs, but it’s happening at a slower rate, said Mouhcine Guettabi, Wilmington’s regional economist and an associate professor of economics at the University of North Carolina Wilmington.  

Two local sectors – leisure and hospitality and business and professional services – witnessed “actual declines” in employment numbers in the last months of 2023, Guettabi said. 

A drop in leisure and hospitality jobs is likely tied to a drop in consumer spending as the era of “revenge spending” that followed the COVID-19 pandemic ends, Guettabi said. 

“We’re starting to see this … consumer fatigue,” Guettabi said. “I think that’s the theme going forward. Sectors that are dependent on consumer spending are not going to have the banner years that they did in 2021 and 2022.” 

As a destination city for beachgoers and other tourists, Wilmington is more sensitive to consumer spending with a “front-row seat” to its impacts, Guettabi said. 

The drop in the business and professional services sector – a category encompassing everything from janitorial services to architecture and engineering – is more unclear. Guettabi said it could be a reclassification of jobs following the sale of PPD to Thermo Fisher Scientific. 
 
Or it could mean businesses are looking for ways to cut expenses by eliminating contracted services. For Guettabi, the cuts indicate a potential decline in economic activity moving forward. 
 
Despite his predictions for a slowdown, Guettabi encourages caution in comparing the local job market in 2023 and 2024 to what Wilmington saw in the years immediately following the COVID-19 pandemic. 

“In my mind, we should try to erase the last couple of years from our minds because taking the growth from the last couple of years and extrapolating forward is a mistake,” he said. “I think it’s much more prudent to say we’re probably going to revert to pre-pandemic growth.”


Millions of Chances

Some job sectors could see a boost from local funds. A focus on increasing the number of trained health care workers in the region is expected to gain momentum this year after officials announced how that funding will be distributed in December.

The Health Care Talent Collaboration, a partnership of local organizations, is slated to receive $22.3 million over the next several years from the New Hanover Community Endowment.

Novant Health separately also pledged $10 million toward health care workforce development in the region.

The endowment plans to give more than $53 million over the next three years to the health care collaboration and other organizations, officials announced Dec. 18. The sale of the county-owned New Hanover Regional Medical Center to Novant Health in 2021 created the more than $1 billion endowment. 

The Wilmington Chamber of Commerce will act as a “convener” between CFCC, UNCW and NHCS, said Natalie English, the chamber’s president and CEO, in December. CFCC pledges to increase the capacity of nursing programs through enrollment growth; UNCW pledges to develop new clinical degree programs through specialized facility development; and NHCS pledges to expand Paxton/Patterson labs, which expose students to high-demand medical careers.

English said the collaborative wants to make the region “sticky” to the trained health care professionals coming out of the new programs.

In announcing the endowment grants Dec. 18, endowment president and CEO William Buster addressed why there were no housing grants included in the most recent grant cycle.

 “Just this morning, we have convened all of the housing leaders in the community,” Buster said. “We took an intentional approach to not fund housing in this particular grant cycle because as we looked at all the proposals, we saw bits and pieces of things that probably needed to be woven together a little bit better.”

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