CONCORD, N.C. -- Business investment, housing construction and employment all improved in Cabarrus County in 2012 over the previous year, setting the stage for a stronger 2013 if the trends continue, local officials and economists say.
“What we think we saw at the end of 2012 is what we think we’re seeing as the first quarter of 2013 rolls out,” said John Cox, president and CEO of the Cabarrus Economic Development Corporation and the Cabarrus Regional Chamber of Commerce.
Cabarrus County saw an increase in permitted new business investment in 2012 compared to 2011. The total new investment was $105.3 million in 2012 compared with $73.6 million in 2011, according to the EDC’s Economic Indicators report. Projected jobs created by that investment was lower in 2012 than it was the previous year with 446 jobs expected from the 2012 investment compared with 508 the previous year.
“It’s a significant increase in commercial permitting, and we have a sense of confidence about that as it relates to the economy, because when private developers are willing to risk their own capital, it’s a strong sign to us that the economy is improving,” Cox said.
Major investments announced in 2012 included S&D Coffee and Tea’s plans to open a $48 million expansion plant in Concord, creating about 200 new jobs; and Corning Inc.’s plans to invest more than $100 million in its Midland plant and create more than 70 jobs there.
Already, in 2013, year, the trend seems to be continuing. Last week, Concord City Council approved an economic development grant that will help bring a $10 million investment to Concord Mills. Simon Property Group, the mall’s parent company, plans to partner with Merlin Entertainments Group to develop a 30,000-square-foot Sea Life aquarium at the mall.
“The attraction has the potential to bring 350,000 new visitors to Cabarrus County every year,” Cox said. “They’re going to eat in our restaurants, shop at our stores, buy our gasoline, stay in our hotels.”
Housing construction market improves
Cabarrus County also experienced an uptick in the housing market in 2012, with 996 permits for construction, compared with 743 for the previous year, representing a 34.05 percent increase.
That outpaces neighboring Rowan County, which reported 128 permits for housing construction in 2012 and 88 permits the previous year
Nationally, Goldman Sachs economists report that more improvement is anticipated.
“We expect a clear improvement in the housing market in 2013,” Jan Hatzius, chief economist with Global Investment Research at Goldman Sachs, said in an interview on the Goldman Sachs website. “That’s particularly true as far as home building is concerned. Home building at this point, we think, is far below a normal level, far below an equilibrium level. The reason of course is that we overbuilt houses for most of the 2000s until 2007.”
Hatzius said the housing market is expected to continue to improve nationally in 2013.
“We had a very large housing bubble which was visible in prices and was visible in construction activity with very large amounts of excess supply in the housing market until recently,” Hatzuis said. “We have seen a fairly sharp reduction in that excess supply and that bodes well for future housing starts.”
Housing prices, though, continue to be lower than they were two years ago in Cabarrus County. The average price of a house sold in December 2012 was about $167,078, which is down 12.5 percent, or $23,919, from the average price of $190,997 reported in December 2010. The average price spiked above the December 2012 numbers in August 2011 and June 2012, but then declined again both times.
State economy expected to continue to expand
UNC Charlotte economist John Connaughton forecasted that North Carolina would have its fourth year of slow but uninterrupted economic growth in 2013, according to his quarterly forecast released in December.
“For 2013, the economy is expected to continue the 2012 pattern of modest (gross state product) growth,” Connaughton said in a statement about the report. “Continued economic instability in Europe and uncertainty about tax increases in 2013 are the main concerns and the principal reasons that growth in both 2012 and 2013 will be sluggish.
Connaughton expects the North Carolina economy to expand by an inflation-adjusted rate of 1.8 percent during 2013. Fourteen of the state’s 15 economic sectors are forecast to experience output increases during 2013. The sectors with the strongest expected growth are: business and professional services with a projected real increase of 6.2 percent; transportation, warehousing and utilities with a projected real increase of 2.4 percent; agriculture, retail, information, and other services – each with projected real increases of 2.3 percent; and durable goods manufacturing with a projected real increase of 1.9 percent.
According to local data, Cabarrus County has experienced improvement in its retail market.
Cabarrus County businesses reported more than $2 billion in taxable sales revenue through the end of October 2012, which was already an increase of nearly 13 percent over the $1.78 billion generated in all of 2011.
Meanwhile, neighboring Rowan County reported $823.8 million in taxable sales revenue through October 2012 compared with $798.9 million through December 2011, or about a 3.12 percent increase.
Unemployment rate improves
The unemployment rate also showed improvement in Cabarrus County in 2012 compared with the previous year.
Cabarrus County had a year to date average of 8.9 percent unemployment in 2012 compared with 10.1 percent in 2011. Statewide, the average unemployment rate in 2012 was 9.6 percent, which was also down from the previous year. The Cabarrus County and North Carolina rate remained higher than the national average unemployment rate of 8.1 percent in 2012.
Connaughton said the state is expected to gain 56,700 net jobs in 2013. Connaughton expects the sectors with the strongest employment increases in 2013 to be nondurable goods manufacturing at 3.2 percent, government at 2.1 percent, and retail trade at 2.0 percent.
Connaughton will present his next quarterly economic forecast report on March 12, 2013.
Contact reporter Karen Cimino Wilson: 704-789-9141.