The state of the Asheville area economy is getting stronger, with job numbers nearing prerecession levels, but wages remain stagnant, according to panelists at the 14th annual Asheville Metro Economy Outlook on Aug. 8.
Three economists took the stage Thursday evening at the Diana Wortham Theatre to deliver facts, figures and graphs on the metro area’s jobs, wages, housing and population. The event, hosted by ParsecFinancial, the Asheville Area Chamber of Commerce and Economic Development Coalition, takes a look at economic trends on the local and national level.
Tom Tveidt, president of SYNEVA Economics, reported that Asheville had added 10,000 jobs since the 2008-09 recession, bringing a total of 177,100 jobs to the area — only 500 short of where it was before the Great Recession. He said jobs had been growing for 32 straight months at an annual pace of 3.6 percent.
“We’re in very heady days right now,” said Tveidt. “We are the fastest growing metro area in the state.”
The sectors experiencing the most growth are retail trade, health services and leisure and hospitality. Government jobs have picked up slightly, manufacturing remains sluggish and construction is still down, according to Tveidt.
However, the leisure and hospitality industry leads in terms of overall growth. The sector currently employs about 26,000 people, and is experiencing an annual growth rate of 10 percent.
On the downside, with retail and leisure and hospitality steering growth, wages have remained pretty flat for the area (from 2007-2013), with average monthly income hovering just above $600. Tveidt said that these two sectors usually pay less and typically employ people only part-time, skewing the data downward. Manufacturing, a higher-income sector, has remained in a slump, meaning not as many people are earning big salaries.
Tourism, a part of leisure and hospitality, can be harder to gauge in terms of economic impact, as it covers a wider array of sectors like retail, food and beverage, vacation or second-home purchases and so on.
Chris Cavanaugh, president of Magellan Strategy Group, reported there had been a strong rebound in visitor spending over the last few years. About 9.1 million visitors came to Asheville in 2012, a 2 percent increase from the previous year. These tourists spent a total of $1.5 billion while here, a 5.3 percent increase from 2011.
Unsurprisingly, food and beverage was the No. 1 expenditure for most visitors — with the plethora of breweries and restaurants to choose from — followed by lodging and retail, he explained.
Cavanaugh compared the $1.5 billion figure to similar yearly earnings of big companies, such as Netflix, Five Guys and, oddly enough, Mentos. “Asheville needs to see itself as a brand,” said Cavanaugh of Asheville’s earning potential.
Housing and Population
More cautiously optimistic news came in the area of homes. After four years of home depreciation, Tveidt said the second quarter of this year showed a half-percent uptick in home values, following state and national trends.
Another small uptick came in population, with an influx of people migrating to the area. Asheville “is 100 percent reliant on new people moving here,” said Tveidt.
Jim Smith, chief economist at ParsecFinancial, said overall the U.S. economy is doing O.K. but performing well below its potential. From 1929-2012, the U.S. economy has grown at about 3.3 percent a year — through wars, recessions and depressions. But, Smith said, just looking at the years 2002-2012, growth has been a meager 1.8 percent.
“Big companies and Fortune 500 companies are doing very well, while small businesses, on the other hand, are miserable,” said Smith.
He said the Index on Small Business Optimism has stayed at recession levels, and that small employers are not seeing the kind of pick up in demand required to expand their companies. This is a problem, Smith notes, because about half the U.S. economy is made up of small businesses, and they account for more than 60 percent of employment.
Still, Smith predicts the U.S. economy will not see another recession in the next two years and that holiday sales will be unprecedented. Smith described the U.S. as a “two-speed economy” in a three-speed world.