Area economy continues growth, low unemployment

Buncombe County is No. 1 — at least when it comes to North Carolina’s workforce. According to the Asheville Area Chamber of Commerce, the county’s unemployment rate in April hit 2.8 percent, its lowest since 2001 and the lowest of all counties in the state for 38 consecutive months. 

“It’s a great sign of the health of our economy,” says Clark Duncan, senior vice president for economic development at the chamber and executive director of the Economic Development Coalition of Asheville-Buncombe County. The past three years have seen consistent growth throughout the region, driven by sectors both expected and surprising.

Tourism and health care, the traditional drivers of the Asheville-area economy, continue to play vital roles. Jobs in health care rose by 11 percent between 2014 and 2017, while jobs in accommodation and food services were up by 8 percent over the same time period.

Explore Asheville (formerly the Asheville Convention & Visitors Bureau) reports that in 2016, 3.8 million overnight visitors came to Buncombe County and an additional 6.1 million people came to the county for the day, together spending $1.9 billion at local businesses. The bureau also notes that one in seven jobs in Buncombe County is supported by the tourism industry. Without those jobs, the bureau says that the unemployment rate would be 15.2 percent.

Those employees serve an ever-increasing number of tourists, according to the most recent available bureau data. Demand for hotel rooms in January was up 8.5 percent over the same time period in 2017, and total airport passengers were up 30 percent.

But Duncan points out that the manufacturing sector actually led Buncombe County job creation in March and April. In March, year-over-year growth in manufacturing was 600 jobs, and in April, year-over-year growth was estimated at 1,100 jobs. “That is more year-over-year growth than health care and tourism,” he says.

By comparison, health services and education saw a year-to-year growth of 200 jobs in March and 200 in April, while the leisure and hospitality sector saw year-to-year growth of zero in March and 200 in April. “It’s fairly unusual to see manufacturing outperforming these other two sectors,” notes Duncan.

Duncan says that the rise in manufacturing jobs can partly be attributed to the region’s economic recovery over the past several years, which created a pent-up demand for critical investments in technology and machinery. “You saw this rush to make fairly significant investments like GE Aviation and New Belgium Brewing,” says Duncan. In May 2016, New Belgium Brewing opened a $175 million brewery in Asheville, and in March of this year, GE Aviation announced it would invest $105 million into the company’s Asheville facility, creating 105 new jobs.

“We see that kind of optimism and confidence in the economy still today,” says Duncan. “People are planning on a two- to five-year timeline, and they are confident in their supply chains and their ability to continue to see growth in their own market.”

Duncan adds that people might be surprised about the local economy’s diversity. “When you dig deep into the numbers, the fastest-growing sector in the Asheville metro economy is professional and technical services,” he says. Chamber data show that jobs in that sector, which includes finance, human resources, legal, sales and marketing and technology positions, grew 6 percent between 2014 and 2017.

Diversification is crucial to having a strong and resilient economy, says Kit Cramer, the chamber’s president and CEO. “We work really hard to attract different types of businesses because that makes you more recession-resistant,” she explains. “The more diverse that economy is, the better off we are all going to be.”

While jobs in many sectors grew between 2014 and 2017, several categories have shrunk as well. Jobs in mining, quarrying, and oil and gas extraction fell by 22 percent, transportation and warehousing jobs dropped by 5 percent, government jobs fell by 2 percent, and agriculture, forestry, fishing and hunting jobs decreased by 1 percent.

Opportunities and challenges

With an eye on the future, Sam Powers, Asheville’s director of community and economic development, says that the city is well-positioned to attract businesses that are concerned with their triple bottom line, an accounting framework that broadens the focus of the financial bottom line to also include social and environmental performance. “Asheville has flourished by being preservation-minded and sustainability-oriented,” says Powers. “Both of those tenets will be attractive to businesses in the future. The city’s progressive and innovative stormwater management program was one of the first programs that New Belgium Brewing noticed as they looked for an East Coast location.”

Duncan agrees, adding that purpose-driven businesses are also a great opportunity for future growth. “These are businesses that see the culture of the business community in Asheville and want to contribute in a meaningful way,” he says. “They’re highly philanthropic. They pay meaningful wages and invest in their workers. Increasingly, they are evaluating communities in which they want to do business.”

Cramer thinks that one of Asheville’s biggest economic opportunities is entrepreneurship. “We are a very attractive place to be, and there are talented people who can choose to live anywhere,” she says. “We want them to come here and start a business. We love businesses that can scale up and really grow. All it’s going to take is for one of those companies to do really well, and you’re looking at a success story.”

Duncan adds that already existing businesses also require support to grow. “Headlines might be grabbed by folks who are coming from out of town and starting new here, but more often than not, the growth is actually coming from existing industries,” he says. “It’s important to us that we are working on retaining businesses, that we are helping them figure out how to address any challenges they might have in doing business here and helping them when they’re ready to expand.”

Of course, with every opportunity comes a challenge as well, and Asheville does have its own unique barriers to growth. Powers sees affordable housing as a major concern but notes that “the city and county are both working to help create more affordable housing.”

“People have a collective freakout when there is a proposal for a new housing development,” says Cramer. “But it’s supply and demand. The more housing we build, hopefully the lower the cost will be of that housing.”

Developable land is also a major challenge in our region. “Unlike Greenville, S.C., and other similar cities, the cost of land and the site development costs make Asheville challenging for manufacturing on a larger scale,” says Powers.

Duncan adds, “Sites where you might encourage a local company to grow into — we have fewer of those because of topography.”

Powers also lists public transportation and lack of diversity as barriers to growth. “Our population is predominatly white,” says Powers. “Many prospective businesses are seeking more racially and culturally diverse locations. The city has established an Office of Equity and Inclusion, which over time should help in building a more equitable and diverse community.”

Looking forward

As time goes on, Powers says that urban areas such as Asheville are projected to keep growing as economic activities continue to cluster in population centers. He cites 2016 data from the Bureau of Labor Statistics showing that job growth is taking place in all types of metro areas while nonmetro areas are actually losing jobs.

Duncan says that Asheville’s unique personality will continue to drive companies to our region. “Talent follows place, and companies follow talent,” says Duncan. “The community assets that we have intentionally developed over the course of the last 20 years have become a real attractant, not only to retaining Generation Z but also attracting those individuals to our community. ”

In 2020, the chamber will roll out a new version of its AVL 5X5 strategic plan. In the meantime, the group will work to discover the trends that will impact the area over the next 20 years. “We are really hoping to identify a few guiding stars that a broad section of the community can agree upon that will allow us to focus our work in economic development and provide guidance for other types of organizations in town,” explains Cramer. “So many times, I think we get dragged into one direction or another based on some very narrow agendas. Instead, we need a broader agreement about a few key things that we want to ensure Asheville and Buncombe County look like 20 years down the road.”

Cramer adds that there’s no better time than now to capitalize on the energy and buzz of the local economy. “I hear people bemoan that we are growing explosively,” she says. “We are not growing explosively. We are growing at a healthy rate, and we need to make hay while the sun is shining,” she says. “It’s important we take advantage of the opportunity to grow.”