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Despite improvements, Rowan hasn’t fully recovered from economic recession

By Josh Bergeron
josh.bergeron@salisburypost.com

SALISBURY — Following the 2008 economic recession, thousands in Rowan lost jobs over a period of years, but it now appears that the county is on the cusp of a full recovery.

Statistics from several of sources show that Rowan County’s economy is doing better, but hasn’t bested pre-recession numbers. Tax revenue received by local municipalities and county government tops levels from before the recession. Residential and commercial building permits are relatively close to pre-2008 levels. The unemployment rate, however, hasn’t risen above its best pre-recession level, and fewer people in Rowan County are employed, according to labor statistics.

“Rowan County has not recovered from the recession,” said N.C. State University economics Professor Michael Walden, citing unemployment numbers. “Most other things are going to feed off of employment. And, in terms of employment, Rowan County has rebounded, but it has not fully rebounded to where it was prior to the recession, unlike the state.”

Those statistics may be proof of anecdotes from local business owners. Jane Crosby, who owns Queen’s Gifts in downtown Salisbury, mentioned her experience and nearby business turnover as evidence that downtown Salisbury hasn’t fully recovered.

“It definitely felt like we had to crawl out of the hole a little bit after the recession,” Crosby said.

For real estate appraiser and USA Made Blades owner Scott Whittington, the story is different. Whittington says USA Made Blade is doing well, but didn’t have a retail facility before the recession. Whittington used his real estate experience as evidence that there’s been limited economic improvement in Rowan County.

“I feel like there’s been a little improvement, but nothing huge,” he said.

There’s optimism, however, about economic prosperity in the near future among Rowan County’s leaders.

“I feel like we’re heading in the right direction, but I believe Rowan County has some structural issues that we will have to deal with before we will be able to declare that we are on our way to success,” said county commissioners’ Chairman Greg Edds.

First, some positives

Although Rowan hasn’t completely recovered, there are a number of economic indicators that have sharply improved from the depths of the recession. For example, the two largest Rowan municipalities — Salisbury and Kannapolis — are generating more sales tax revenue than ever before.

Kannapolis generated a total of $7.34 million in sales tax revenue during the 2015 fiscal year. Salisbury generated $5.89 million in sales tax revenue. At the lowest point in the recession, Kannapolis generated $4.97 million in sales tax revenue and Salisbury generated $4.52 million.

The 2016 fiscal year wraps up on June 30, but both municipalities are projected to beat their 2015 numbers. At the county level, sales tax numbers are also projected to beat 2015 levels.

Edds called sales tax proceeds a “barometer of disposable income” and available retail options. He focused on the fact that several new stores — Dick’s Sporting Goods for example — have opened locations in Rowan County.

“We are bringing in exciting, new retail that we’ve not had before,” he said. “We’ve talked about retail leakage before, where people go somewhere else like Concord Mills to spend their money, and bringing in new retail may help capture that.”

He said Rowan County may never be able to capture all of its retail leakage, but “stopping the backward slide” is important.

Another positive: downtown Salisbury’s building occupancy rate has increased in percentage from the mid 80s to the 90s in just three years, said Downtown Salisbury Inc Director Paula Bohland.

“Many, many times the health of downtown will indicate the health of the rest of the city,” she said. “We’re all in this together. The health of one sector of a community impacts the health of another sector.”

Rowan County Chamber of Commerce President Elaine Spalding said her organization is stronger than it was three years ago, when she took the job as its president. RowanWorks Economic Development Director Robert Van Geons also said the county is nearly out of available industrial space.

A dose of reality

The unemployment rate tells a different story than other statistics. Although Rowan has improved slightly from the depths of the recession, when 14.1 percent of people were unemployed, there’s still significant work to do before the county beats or matches its pre-recession levels.

A quick glance at the unemployment rate may suggest Rowan has nearly matched it’s pre-recession levels. At the end of 2015, the rate was 6 percent, slightly higher than the best pre-recession rate — 5 percent in 2006. In 2007, the rate was 6 percent.

However, there’s more to unemployment figures than a percentage, Walden said.

“To be counted as unemployed, you have to be an individual who doesn’t have a job and who wants a job,” he said. “You also have to be someone that’s actively looking for a job … So, the unemployment rate can be a deceptive number.”

Although Rowan County’s unemployment rate is close to recovering, about 6,300 fewer people were employed at the end of 2015 than the best point before 2008, according to labor statistics. An even larger number of people have dropped out of the workforce.

Van Geons said a change in the way statistics are calculated may be to blame for the number of people counted as no longer in the workforce. However, he also said Rowan County’s economy hasn’t fully recovered.

“While the economy isn’t moving forward the way or at the pace everyone would like to see, we are growing,” he said.

Walden speculated that Rowan and other rural counties that previously relied on industries such as textiles “have not really been able to latch onto anything to replace those.” Meanwhile, metropolitan areas have been able to embrace industries that include technology and pharmaceuticals, he said. Many of the state’s largest metropolitan areas also contain major universities.

Edds admitted that Rowan County’s economy could grow at a faster rate than it has.   

“I don’t think from an employment perspective we are anywhere near where we should be,” he said. “Even though we had a 6 percent unemployment rate (at the end of 2015), a lot of people have just stopped looking for a job. They have given up.”

Rowan’s unemployment rate for April — the latest available — is slightly lower than 6 percent. However, labor statistics still show that thousands have dropped out of the workforce.

Better days ahead?

Despite the mixed economic bag, Rowan County’s residents and elected leaders say they’re optimistic about the future. Spalding pointed to the 2014 County Commissioners election as a turning point, at least one of them, for her optimism about the future.

“The leadership changes at the county commission level and with their improved working relationship with other municipalities has energized the business community,” she said.

Van Geons said 23 separate groups expressed interest last month in moving to Rowan County. That’s a number not seen before in recent history, he said.

The goal of county commissioners has been to provide more space for new businesses. Edds said the problem isn’t that businesses aren’t coming to Rowan County. A lack of space can also hinder growth.

“One of our goals right now is to create a system where we won’t get caught with our pants down, without site-ready facilities,” Edds said. “We need to be identifying the next two dozen industrial sites, not the next two or three.”

With the interest Rowan has received from new businesses, Van Geons said Rowan County now has the opportunity to significantly shape its future.

“If we make the right investments, we can drive our community forward and see some really spectacular results,” he said.

Extending water and sewer lines to large economic development sites is also important, Edds said.

“We’re not just out here doing up a budget, approving board appointments, listening to the planning department and approving a solar farm. We’re trying to work on a larger scale,” Edds said. “We’re trying to work on projects that we feel could really be transformative for our community and rebuild a reputation of cooperation and partnership.”

Contact reporter Josh Bergeron at 704-797-4246.

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