Balanced Economy — Broad Opportunity
HISTORICALLY, CHARLOTTE HAS BEEN PERCEIVED as a textile center and more recently a banking center. While Charlotte is justifiably proud of the industries with which it has been linked over the years, narrow characterizations sell this city’s economy short. Charlotte enjoys a vibrant, balanced economy that encompasses many sectors and companies that range in size from multinational to microbusiness.
That variety helps make Charlotte’s economy one of the healthiest and strongest in the nation. Diverse business interests shelter the city from problems that can result from slowdowns in certain sectors, corporate mergers and buyouts, plant closures and other economic challenges. The solid base also facilitates exceptionally strong growth during economic upswings.
While the economy’s strength is certainly a plus, companies considering a relocation to Charlotte will find other advantages in this broad-based economy. For example, suppliers and services are abundant and convenient. Employers’ costs for wages, benefits and labor overhead, such as worker’s compensation, unemployment and health insurance coverage, are significantly lower than in other regions. And Charlotte-Mecklenburg offers an unusually rich quality of life, with ample opportunity for companies and executives who wish to actively participate in making this city an even better place to live and work.
According to 2011 Division of Employment Security figures, employment in Mecklenburg County is well distributed among all major business sectors. Of the 565,789 persons employed in the county, there are 51,630 in finance and insurance, 56,144 in retail trade, 33,771 in wholesale trade, 32,828 in manufacturing and 19,420 in information.
Mecklenburg County accounts for more than 75 percent of total employment in the Charlotte region. Charlotte-Mecklenburg’s largest employers represent many sectors, including health care, government services, education, banking and finance, transportation, retail, telecommunications and manufacturing. The city boasts many Fortune 500 corporate headquarters, including Bank of America, Duke Energy, Sonic Automotive, SPX and Nucor. Lowe’s, Family Dollar and Domtar are also headquartered locally. Charlotte ranks eighth nationally in number of Fortune 500 headquartered companies. It is also home to operations of 264 companies listed in the Fortune 500.
In addition, 4,277 companies in Mecklenburg County are included in the 2012 Hoover’s Database with sales over $1 million, including 27 companies with sales exceeding $1 billion. Of these 4,277 companies, 971 are headquartered here. The firms represent a broad range of industry sectors, the largest being wholesale trade, manufacturing, finance, insurance and real estate.
Small and medium-size companies are equally important to Charlotte’s economy. The city has been cited by Entrepreneur and Fortune magazines as one of the nation’s best large cities for entrepreneurs to start and run a small business. Of the 27,889 companies with operations in Charlotte, 26,095 employ fewer than 50 workers; 1,697 employ between 50 and 500 workers; and 104 firms employ more than 500 workers. The 2007 Economic Census indicates there are more than 4,100 minority businesses within the county, which employ more than 38,000 people.
Growing Manufacturing Base
To outside observers, Charlotte’s strength as a manufacturing center may come as a surprise. In fact, this city has long been a leader in manufacturing. Mecklenburg County is home to 1,107 manufacturing firms — more than any other county in the Carolinas. Manufacturing has long been a key element of Charlotte’s economy. Textiles led the way early last century when the cotton industry moved south from New England, establishing Charlotte as a textile center. Today, Charlotte manufacturers work in many different fields, including nonelectrical and electrical machinery, metalworking and chemicals. Manufacturers in Charlotte-Mecklenburg represent every major NAICS category. Today, Charlotte has manufacturing clusters in medical and dental equipment, plastics, optical technology and defense.
As we move through the 21st century, the region is placing even greater emphasis on high-tech, bio-tech and other knowledge-based industries. Charlotte has several research organizations that support this changing emphasis. The Electric Power Research Institute and the Polymers Center of Excellence are headquartered here. The Charlotte Research Institute at UNC Charlotte partners with local firms to help develop innovative new products and technologies.
Manufacturing firms that locate operations in Charlotte-Mecklenburg will find a low-cost labor environment. According to the U.S. Bureau of Labor Statistics, the average earnings of production workers in the Charlotte MSA for June 2012 was $16.01 per hour — lower than the national average.
Helping to keep labor costs low is North Carolina’s status as a right-to-work state. The state has the lowest unionization rate in the nation; only 3 percent of Charlotte’s workforce is unionized. North Carolina also has one of the nation’s lowest unemployment insurance tax rates as well as worker’s compensation rates that rank among the lowest in the nation. Worker productivity, however, is exceptionally high. Studies show that N.C. workers produce more output per wage dollar than their counterparts nationally.
Superior Distribution and Transportation
Thanks to its prime location at the intersection of Interstats 77 and 85 as well as its manufacturing strength, Charlotte-Mecklenburg is one of the nation’s leading distribution centers. The city is home to distribution operations for such diverse companies as Family Dollar, Stanley Black & Decker, General Motors, Lucent Technologies, Rite Aid and TJ Maxx.
The city’s extensive transportation network facilitates distribution. Charlotte Douglas International Airport (CLT) is the world’s sixth most active airport in total operations and 11th largest in the nation in terms of total passengers. The airport averages 700 flights daily to more than 170 cities nationwide and around the world. Upon completion of the US Airways/American Airlines merger, CLT will become the second-largest hub of the nation’s largest airline.
The airport’s cargo service is equally busy, handling more than 127,000 tons of domestic and international cargo in 2012. The Charlotte Air Cargo Center, which includes 500,000 square feet of facilities and 50 acres of aircraft ramp space, is served by 20 cargo airlines and 46 freight forwarders.
Not surprisingly, the airport is also a major employment center. The employers that maintain staffs on site have nearly 20,000 workers. Of these, more than 7,000 are employed by US Airways, with nearly 13,000 additional workers employed by other airlines, tenants, other businesses and the City of Charlotte’s Aviation Division.
A well-established network of ground transportation and other services complements Charlotte’s air service. The Charlotte region is the center of the country’s largest consolidated rail system. Norfolk Southern Railway and CSX Transportation link 43,200 miles of rail between Charlotte and 23 Eastern states. Norfolk Southern is constructing a new intermodal facility on airport property, which will double its lift capacity and reduce the number of trucks on the roads.
Broad-Based International Business
Charlotte-Mecklenburg has seen steady and impressive growth in international business. The presence of foreign-owned firms in Mecklenburg County dates back to 1925, when Sandoz Corp. moved to Charlotte. By 1970, 60 foreign firms were located in the county.
In 2012, that number had grown to 635 — a tenfold increase in 42 years. Charlotte also consistently ranks highly on fDi Magazine’s list of top U.S. cities for foreign investment.
Currently, foreign-owned companies with operations in Charlotte-Mecklenburg represent 45 nations. Germany leads the list with 127 firms, followed by Great Britain, 84; Canada, 57; Japan, 55; and France, 41.
The companies also represent a wide variety of business specialties. The 635 foreign-owned businesses in operation in 2012 represent 16 of the 19 major industry classifications (NAICS). Categories with major representation include wholesale trade of durable or nondurable goods; chemicals and allied products; rubber and miscellaneous plastic products; industrial and commercial machinery; and computer equipment, transportation services and business services.
Unparalleled Financial Services
Because of its position as the nation’s second-largest banking center, financial services may be the most widely recognized sector of Charlotte’s economy. Of the 51,630employees in finance and insurance, 33,098 are employed in commercial banking, and insurance carriers employ 11,829.
The insurance industry is well represented in Charlotte. The city is home to 36 companies with more than 50 employees. Five employ 500 or more. SCOR Global Life Americas (formerly Transamerica) and AXA Equitable have national operations centers in the city; in one of the state’s largest job announcements, MetLife recently announced the relocation of 2,600 insurance jobs to North Carolina, more than 1,300 of which will be in Charlotte.
In recent years, the city has expanded its move into the investment industry, attracting national customer service and operations centers for Vanguard Group and TIAA-CREF.
The abundance of financial resources in Charlotte is certainly an advantage for companies that seek a ready source of capital, money management and investment advice services. The city ranks second nationwide in terms of banking assets headquartered here ($2.2 trillion, behind only New York) and is headquarters for Bank of America, the nation’s second-largest bank holding company. In addition, 17 of the nation’s top 20 banks have operations in Charlotte. The city is also home to a branch of the Federal Reserve Bank of Richmond.
Long-Term Growth Continues
Perhaps most importantly, Charlotte’s robust economy is not a new phenomenon. This city has enjoyed extraordinary growth for the past decade in terms of new-business development. From 2003 to 2013, according to chamber statistics, 7,039 new businesses created more than 57,277 jobs and absorbed 94 million square feet of floor area, representing a total investment of $9.2 billion.
Investments ranged from downtown office towers to regional retail centers, manufacturing facilities and Fortune 500 headquarters to an NBA expansion team. According to new and expanded business indicators, Charlotte saw $1.3 billion in business investment during 2012. The 1,180 firms making the investment created more than 9,595 new jobs.Shaping the Future
Charlotte’s balanced economy didn’t just happen. For decades, this city’s business and civic leaders have actively sought to lay the foundation to encourage this economic success.
Today, Charlotte’s leaders are in the process of shaping the city’s future again. This time, they are studying where the city needs to head in order to be successful well into the 21st century.
The Charlotte Chamber has taken a leading role in this effort with a strategic planning process designed to maintain and expand the balanced economy that Charlotte currently enjoys. The goal of the process is to develop initiatives that will support existing businesses as they expand and mature, as well as attract new businesses.
The process has shown that Charlotte-Mecklenburg would be ideally positioned as a “global knowledge center,” in which highly skilled workers apply the latest in technology to create products and services for a diversified global market. Specifically, the city is particularly well suited to host operations for a number of focus industries, including precision metrology/optoelectronics, biosciences and security technology as well as traditional industries related to information, financial services, transportation and manufacturing.
Clearly, Charlotte-Mecklenburg enjoys a strong economy with a breadth and depth that is virtually unparalleled in any other U.S. market. Charlotte’s business and civic leaders are committed to maintaining that advantage. As the 21st century moves forward, Charlotte is poised to create and nurture an economic sustainable advantage as powerful as the one it currently has. That will help ensure that companies working in and relocating to Charlotte-Mecklenburg will continue to enjoy all the benefits of this city’s healthy, well-balanced economy.