North Carolina Payrolls Rise in March

North Carolina's Recovery Is Gaining Momentum

North Carolina’s economic recovery is clearly gaining momentum. The state added 17,300 jobs in March and saw its unemployment rate fall half a percentage point to 5.2%. After losing momentum amidst another spike in COVID cases late last year, hiring appears to be revving back up. The return of warmer weather has allowed restaurants and bars to reopen outdoor venues. Consumers are also venturing out more now that COVID cases have fallen and vaccinations are continuing to ramp up.

Most industries added back jobs in March, led by a 4,300-job gain in the state’s important manufacturing sector. While manufacturing payrolls remain 2.5% below their year-ago level, businesses are actively engaged in trying to bring back workers. Job openings have surged in recent months. Many firms have taken out billboards and are offering signing bonuses in an effort to attract workers. The hard-hit leisure & hospitality sector added 4,100 jobs with most of the gain coming at restaurants. The leisure & hospitality sector still has long way to go to replace all the jobs lost during last year’s lockdowns, however. Employment in the industry remains down 12.9% from last March, with 65,500 fewer people working in the industry.

Overall, employers have now added back 418,000 of the 575,000 or 73% of the jobs lost during the lockdowns put it place at the start of the pandemic. We expect the pace of hiring to strengthen this spring and look for North Carolina to add 176,000 jobs this year, more than recovering the remaining losses.

North Carolina's Tech Sector Continues to Ramp Up

Professional & business services added 3,800 jobs in March. Almost one-third of that gain was in professional & technical services, which is where employment in much of North Carolina's tech sector shows up. Professional & business service firms have added 15,600 jobs over the past year, with 9,100 of those new jobs added in professional & technical services. Most of that increase has been in management technical consulting services, which has added 4,500 jobs over the past year, and computer systems design & related services firms, which have added 3,000 jobs. The industry employment data, however, only offer a partial glimpse into tech employment. Many of the jobs added in financial services and a whole host of other services are in IT functions.

Transportation & warehousing, which has added 17,100 jobs over the past year, is another notable bright spot. The strongest growth has been in warehousing & storage, which has added 15,900 jobs over the past year and couriers & messengers, which added 8,800 jobs. By contrast employment in air transportation remains 9%, or 1,500 jobs, below its year-ago level. Employment in truck transportation is also down slightly over the past year, even though trucking firms are scrambling to find drivers.

Manufacturing and Construction Are Set to Improve

Manufacturers added 4,300 jobs in March, with gains roughly split between durable and nondurable goods producers. The pharmaceutical industry has been a notable bright spot within the manufacturing sector. Employment in the state's chemical industry, which includes pharmaceutical manufacturing, rose 2.6% over the past year, netting 1,100 new jobs. Most of that increase was in pharmaceuticals & medicines. North Carolina's life sciences industry has seen a surge in capital investment this past year, with most of the projects slated for the Research Triangle region and eastern North Carolina.

Construction firms added 300 jobs in March, despite what appears to be an epic housing boom in the state's larger metropolitan areas. Construction employment remains down 1,300 jobs over the year. We suspect most of those cuts came in commercial construction, where the pipeline of projects has been winding down. The year-over-year figures certainly point in that direction, with employment at firms involved with the construction of buildings declining 4.1% and employment at firms involved in heavy and civil engineering declining 3.1%. By contrast, employment at specialty trade contractors, which is mostly tied to home building, rose 1.6% over the past year, reflecting a 2,300-job gain.