Creating a flow of dollars into a region is a fundamental key to economic prosperity. One of the best ways to gauge a community’s standing in this area is through traded sector employment. Put simply, traded sector employment measures the proportion of employment in sectors whose products are sold outside the region. Industries are classified as either “traded” (production is concentrated geographically and products are sold outside your region) or “local” (products stay in the area). For example, automobile dealerships are “local,” but automobile assembly facilities are “traded.”
A strong traded sector provides two advantages: a flow of income from outside the region that increases wealth within a community, and jobs that typically pay more than those in the local sector.Without a strong traded sector, our Region will struggle to grow economic prosperity, as the same dollars are exchanged without an influx of any new capital. Unfortunately, the data revealed in Cape Fear Future’s Regional Economic Scorecard published in November 2015 showed the Wilmington Region’s traded sector employment lags our peer cities, making it an area of concern.
Nationally, over the time period from 2010 to 2013, traded sector employment grew by 7%. Among our peer regions, Raleigh’s, Chattanooga’s, and Charleston’s economies showed strong traded sector employment, coming in at growth of 13.6%, 10.6% and 7.2% respectively. Roanoke’s and Myrtle Beach’s traded sector employment grew moderately at 0.6% and 3.4%, respectively, while Pensacola’s shrank by -10%. Unfortunately, in our three-county Region (New Hanover, Pender, and Brunswick), traded sector employment decreased by almost 14% over the same time period.
As reported in the Regional Economic Scorecard, our Region’s Traded Sector Employment Index came in at a 62 (as compared to U.S. average of 100). This means our region is performing 38% below average in this category, and—perhaps more disturbing—this is a 10-point loss against the national average since 2010. Of the peer cities we studied, only Myrtle Beach and Pensacola ranked lower against the national average at 57 and 52 respectively.
This poor showing is likely due to the loss of manufacturing jobs over the last decade. To move this number closer to the U.S. average and reap the benefits of the higher paying jobs associated with the traded sector, as well as enjoy the inflow of dollars into the Region, we need community consensus on attracting more desirable manufacturing. We have had recent successes with Vertex in New Hanover County and Acme Smoked Fish in Pender County. Continuing that positive momentum in manufacturing should be a key focus area as economic development initiatives are planned.
Business services are another area where we can take advantage of our educated workforce. Nationwide, the business services sector is the largest traded sector category. Our community is also bolstered by the in-flow of dollars from outside the region by tourism and film production. Those who visit the Region patronize local shops, restaurants, and hotels. Continuing to build on our community’s tourism assets will help grow the traded sector, as will ensuring that our local film industry continues to be competitive in attracting projects. Both tourism and film bring millions of dollars of new money into our community, which is why the traded sector is so vital.
While the news here isn’t good, we believe that revelations such as these show that the Regional Economic Scorecard can be a valuable tool. After all, knowing where you need to go starts with knowing where you are. That simple concept drove the creation of the Scorecard, and while chambers of commerce have been historically known for extolling the sterling qualities of their region, an objective report–one which benchmarks us against peer regions using hard data to show where we excel and where we have challenges–could be just as, or even more, valuable to our community in the long run.
The Scorecard is intended to help business and community leaders and elected officials make better-informed decisions concerning factors that affect Wilmington’s economic health. It will be published annually so we will be able to measure our progress in the key areas of economic development outcomes, human capital, innovation and entrepreneurship, and quality of place. By disseminating the data throughout the Region to stakeholders and working with partners, we can create positive movement in our rankings in these key areas and improve economic prosperity. Those next steps are key, and so is continuing to collect, publish and share this data with the community so we can see where our efforts are making a difference and if other regions are rising to meet challenges as well.
Over the last few years, there have been commissioned studies (such as the Garner Report) which have offered plans and suggestions that can help our community become more prosperous. Additionally, there has been constructive dialogue within the community about improving our permitting and other regulatory processes in order to help us continue to attract and organically grow quality jobs. As the voice of business in our area, the Wilmington Chamber of Commerce looks forward to continuing to bring our businesses, elected officials, interest groups and local concerned citizens together to work out an actionable plan to help us move our community forward in a positive direction for local job growth in Traded Sector employment.
If you haven’t received a copy of the Scorecard, you may pick one up at the Chamber, or use the picture link on the home page of our website to view it online: www.wilmingtonchamber.org.