NORTH CAROLINA ECONOMIC FORECAST ROUND TABLE
NORTH CAROLINA'S gross domestic product grew 4.1 % from 2005 to the second quarter of 2015, according to the U.S. Department of Commerce's Bureau of Economic Analysis, while the nation's GDP grew 3.8%. The state's economy will continue to grow this year, say the experts on the panel recently assembled by Business North Carolina magazine. They also offered insight into what will fuel the growth and advice on solving the problems that will affect businesses in the coming years.
The discussion was moderated by Ben Kinney, Business North Carolina publisher, and hosted by Campbell University's Lundy-Fetterman School of Business at the university's law school in Raleigh. Additional support was provided by North Carolina Association of Realtors and First Citizens Bank. The transcript was edited for brevity and clarity.
Lundy Chair of the Philosophy of Business, Buies Creek-based Campbell University
SCOTT DAUGHERTY state director, Raleigh-based N.C. Small Business and Technology Development Center
JENNA CARPENTER dean, School of Engineering, Campbell University
DAVID DOCTOR president and CEO, Charlotte-based energy industry trade association E4 Carolinas
BRENT CILIANO chief investment officer, Raleigh-based First Citizens BancShares Inc.
TONY SMITH immediate past president, Greensboro-based N.C. Association of Realtors
WHAT WILL NORTH CAROLINA'S ECONOMY LOOK LIKE THIS YEAR?
ABBEY I see continued growth fostered partly by the state's lower income and corporate tax rates. I expect growth to be 2.4%, even in light of the Federal Reserve raising interest rates in December. That's in line with U.S. GDP growth projections.
DOCTORS Some energy sectors will improve, and others will hold their own. Nuclear will be flat for the next few years, but small modular reactors, which are a cost-effective alternative to building traditional-sized nuclear plants, are on the horizon. Several Carolina companies are researching, designing or developing components for them. Solar will continue to be big despite what you've heard about North Carolina winding down incentives. Many of the East's largest solar developers are in North Carolina. The Atlantic Coast Pipeline, which is being built and managed in part by soon-to-be-merged [Charlotte-based] Duke Energy Corp. and [Charlotte-based] Piedmont Natural Gas Co., will add natural-gas access on the East Coast and spur industry. The power-generation industry is decommissioning coal plants and replacing them with natural-gas power plants.
DAUGHERTY Growth has been relatively modest over the last several years as we exited the recession and solved financing challenges. We're optimistic that North Carolina's economy will grow this year because of a number of factors, including strong small-to-midsize businesses. They account for 45% of private-sector employment and 45% of the state's GDP.
CILIANO It will be a tale of two halves. The slow global growth and persistently low inflation of the last six months of 2015 will continue through the first half of 2016. North Carolina's GDP receives twice the contribution from manufacturing than the national average. Manufacturing numbers were bad in the December Federal Reserve Bank of Philadelphia's Business Outlook Survey. Those might add pressure over the first six months. We've had an implosion of commodities, whether it's oil, base or ferrous metals, agricultural products or livestock. All that sounds dire, but global growth will resume in 2016's second half if we get some stabilization, specifically in commodities. A strong dollar doesn't help businesses, especially from an international perspective. The dollar, while...