Wilmington’s labor market remains strong, although rumors of a future economic downturn may force some local employers to brace for a drop in business.
The job market remains strong both nationally and locally, despite attempts by the U.S. Federal Reserve to rein in inflation by raising interest rates, said Mouhcine Guettabi, Wilmington regional economist and associate professor of economics at the University of North Carolina. Wilmington.
In fact, the number of jobs in the United States increased by 236,000 in November, according to a recent report from the United States Bureau of Labor Statistics. The number of people employed in New Hanover County is surpassing pre-pandemic levels, Guettabi said, and the region has rebounded faster than other North Carolina cities from the economic impacts of the COVID-19 pandemic.
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“We’re still seeing economic growth, job growth, even though there’s this narrative, this unease, about economic decline,” Guettabi said.
He attributes this strong labor market to stable consumer spending and employers who are reluctant to lay off workers after experiencing prolonged labor shortages during the pandemic. It kind of creates a “messy economic picture” of the job market locally and nationally, Guettabi said.
The Federal Reserve raising interest rates in an effort to control inflation will impact businesses and the local economy, but there is a time lag between when interest rates rise and when where businesses feel an impact.
“It looks like it’s a healthy labor market, but again there’s some of that uncertainty smoldering below the surface,” Guettabi said. “It will just be this slow combustion of uncertainty.”
New Hanover County’s labor market is supported, in part, by its five largest employers, which include Novant, New Hanover County School System, University of North Carolina Wilmington, PPD, and New Hanover County. Hanover.
Each organization employs more than 1,000 people, according to the North Carolina Department of Commerce. In 2020, there were 104,792 people employed in New Hanover County with about 7,935 total employers, according to the latest data from the US Census Bureau.
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Three of the county’s top five employers — the public school system, UNCW, and New Hanover County — are in the public sector, a factor that could help insulate the county, at least to some degree, from sudden changes in government. ‘use.
The private sector tends to be less nimble than public sector companies, meaning they can easily hire when the economy is booming and downsize during economic downturns, Guettabi said.
“The structure of the institutions means that we are not going to see a significant decline immediately,” Guettabi said, “but … these institutions still depend on revenues that will come from consumer spending or the robustness of economic activity.”
While the region’s largest employers may be more insulated from rising interest rates and inflation, Guettabi sees other businesses as more vulnerable to changes in the economy. The tourism and leisure industry, for example, could be hit if consumers decide to forgo travel to save money as inflation climbs.
“Any company that does something fancy or anything non-essential will be the first to go when people start thinking very hard about their budget,” Guettabi said.
“If I don’t know if I’m going to get a job or not, everything that isn’t necessary now takes a back seat, so that second car, that motorbike or that boat,” he added. “The toy industry, if you will.”
Real estate businesses and those in housing-related fields could start to feel the effects of more cautious buyers as interest rates rise, Guettabi said.
As for the region’s five largest employers, here’s how they’re feeling the effects of rising inflation and higher interest rates:
Like many health systems, Novant Health’s Coastal Region — which includes New Hanover Regional Medical Center and other Wilmington facilities — has faced rising costs since the onset of the COVID-19 pandemic, according to Shelbourn Stevens, president of the coastal region of Novant Health.
Despite these higher costs, the system was able to raise base pay and give bonuses to its workers – a figure totaling $65 million. The company also made progress on plans to add new facilities in the Wilmington area, including Scotts Hill Medical Center and a medical office under construction on the campus of Novant Health Brunswick Medical Center.
In the coming year, the healthcare company is looking to recruit more providers in the Wilmington area. Novant currently employs about 8,500 people in the coastal region, according to Stevens.
New Hanover County School System
The New Hanover County school system is not immune to fluctuations in the economy, according to Russell Clark, the system’s media relations manager. Changes in the economy, for example, can increase the cost of employee benefits.
Funding for the school system comes from the federal, state, and county governments. Money received from each source is used to fund different school functions and is subject to changes in the economy.
“As economic fluctuations affect all of these agencies, we also feel it through our allocations and allocations,” according to Clark.
The school is constantly looking for ways to reduce costs and expenses, which may include consolidating positions, streamlining processes, and working with suppliers to find ways to reduce costs for the school.
The school system employs about 4,368 people, including 3,515 full-time and 853 part-time, according to Clark.
University of North Carolina Wilmington
The University of North Carolina at Wilmington has felt the effects of inflation in higher costs for utilities, insurance premiums, equipment, supplies and services, according to Vice Chancellor Miles Lackey. of the university for business affairs.
Inflation has also reduced the purchasing power of faculty and staff, an impact that has impacted retention as university employees seek higher compensation elsewhere.
To address these challenges, UNCW has “continued practices that have allowed the campus to operate effectively in the past, while seeking new opportunities to improve operations and reduce expenses in the future,” according to Lackey. This includes leveraging competitive purchasing agreements, implementing energy conservation protocols, and improving business processes.
Lackey also noted that salary increases supported by the North Carolina Legislature in recent years have helped the university deal with continued inflation.
“As long as the economic headwinds remain, UNCW is committed to continuing to provide students with the high-quality education they expect and deserve,” Lackey wrote in a statement to StarNews.
PPD, a subsidiary of Thermo Fisher Scientific
Wilmington-based PPD is booming, according to company executives.
Thermo Fisher Scientific, Inc. purchased PPD in 2021. Since then, the company has grown, according to a statement from David Johnston, senior vice president and president of clinical research at Thermo Fisher Scientific.
“For 2022, our clinical research business continues to experience significant organic growth, reflecting strong customer demand to support clinical trials of new therapies and vaccines in development,” Johnson wrote.
Thermo Fisher Scientific expanded its workforce, which increased by nearly 5,000 workers. This brings the company’s total workforce to around 35,000 people worldwide.
Johnson remains optimistic about the company’s continued growth, even during economic fluctuations.
“Thermo Fisher is incredibly well positioned to navigate dynamic economic times,” he wrote in his statement. “The company has a strong track record in this area and as a result has become an even stronger industry leader in the process.”
New County of Hanover
Since New Hanover County is primarily funded by property sales and taxes, any changes to the property tax base or tax collection rate would have the greatest impact on revenue, according to Alex Riley, New Hanover County Communications and Outreach Coordinator.
Although inflation drove up the cost of capital projects, the county enjoyed a strong economy with low unemployment and high business activity.
“So higher revenues have significantly offset cost increases,” according to Riley.
So far, economic fluctuations have not resulted in any changes to the service and county leaders do not anticipate any layoffs. The county employs approximately 2,061 people.
The biggest challenge the county has faced is a tight labor market, which the County Board of Commissioners decided to address this summer by adjusting the county’s pay scale to make salaries more competitive.
To cope with the rising cost of capital projects, the county is relying on “value engineering techniques” and has put some of its projects on hold. As county employees begin the budgeting process for the next year, county leaders are focused on core services and efficiency, according to Riley.
“While we hope this does not happen, we are taking the necessary steps to prepare for a recessionary scenario,” he wrote.
Riley noted that while rising costs impact the county the same as any other business, the county has a mandate to provide certain services to citizens, despite any change in the economy.
Journalist Emma Dill can be reached at firstname.lastname@example.org.
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