The tone was conservative and full of worry at yesterday’s Economic Forecast Forum hosted by the North Carolina Bankers Association and the state Chamber. Incoming Governor Pat McCrory kicked off the annual event declaring the state’s brand had been diminished during the economic downturn. The state’s top Republican said North Carolina will see prosperity again when more people are put back to work.
Governor-Elect Pat McCrory was greeted by a welcoming crowd of more than one thousand bankers, business leaders and policy-makers – a room full of friends. But his opening jokes didn’t play too well.
Pat McCrory: "You know there are really some great jobs around here that don’t require much work or no work at all either. Former NC-State football coaches. Oh boy, I’m stepping on some toes."
And McCrory didn’t stop there.
Pat McCrory: "UNC professors. Oh, you guys can’t take it, hugh."
McCrory was referring to a scandal involving academic fraud. But McCrory quickly got down to business in his speech at the Sheraton Imperial in Durham.
Pat McCrory: "There is concern, there is nervousness. And what we need to do is find a way through partnership to make NC the leader in recovering from this very, very difficult economy."
McCrory says he’s ready to be sworn into office Saturday and sworn at on Monday as he prepares to make some crucial decisions. Like how to implement the Affordable Care Act – also known as Obama Care; how to re-pay two-and-a-half billion dollars in unemployment assistance; and how to transform the state’s corporate and personal income tax structure.
Pat McCrory: "I don’t want to step on people’s toes to cause pain, I want to step on people’s toes to get them to stand up and recognize we got a problem and we got to fix it here in North Carolina. And that’s what we’re going to start doing on Saturday."
One way economists say North Carolina can fix its standing in the country is to create jobs again. John Connanughton is a professor of Economics at UNC-Charlotte.
John Connaughton: "The real problem here is not spending, not tax rates, but economic growth of the American economy and of the North Carolina economy. That’s the real problem. We have lost our economic mojo."
Connaughton says between 2007 and 2012 – North Carolina lost 333-thousand-400-jobs. So far – the state has recovered less than half of those jobs. He says we can’t expect to see really good job growth until 2014. Mark Yusko – the head of Morgan Creek Capital Management says he also has little faith in 2013. He says by the Spring, the country will likely be back in a recession.
Mark Yusko: "Three out of the four requirements for a recession by NBR are already saying we’re in a recession. The only one that’s not is fake. The only one that’s not is the employment number."
Talk of a slow-growing economy is no surprise to Lew Ebert, President and C-E-O of the North Carolina Chamber of Commerce. Ebert says he’s convinced it will take a few years to get out of this downturn.
Lew Ebert: "I think North Carolina is busy chipping away, we’ve been probably impacted harder than most. But I think we have obviously a new governor, a new legislature that are very focused on how to double the rate of job creation and get the economy moving."
UNC-Charlotte’s Connaughton has predicted two-percent growth for North Carolina’s economy for the next two years – but he says the target should be more like three percent.