HomeMy WebLinkAboutAgenda - 05-04-2021;12-6 - Information Item - Memorandum - Financial Report - Third Quarter FY 2020-21 1
ORANGE COUNTY
NORTH CAROLINA
FINANCE and ADMINISTRATIVE SERVICES
Gary Donaldson, CTP,Chief Financial Officer I gdonaldson@orangecountync.gov I PO Box 8181, Hillsborough, NC 27278 919.245.2453
MEMORANDUM
To: Board of County Commissioners
From: Gary Donaldson, Chief Financial Officer
Date: May 4, 2021
Re: Financial Report-Third Quarter FY 2020-21
This Third Quarter Financial Report provides an updated status of Revenue and Expenditure of the County's
Operating Funds as compared with the prior fiscal year. Following a review of the first nine months of FY 2020-
21 General Fund, Sportsplex and Visitors Bureau revenues are projected to be lower than budgeted (Tables 1
and 2).
Table 1: FY 2020-21 General Fund Revenue Losses
COVID-19 Recession Impacted Revenues Notes
Federal Detention Fees $ (1,000,000) Potential to be larger revenue declines
Motor Vehicle Tax $ (700,000) Lower motor vehicle sales
Investment Earnings $ (500,000) Lower interest rate environment
Planning/Inspection Fees $ (400,000) Decreased inspections due to permittee closures
DEAPR Fees $ (400,000) Facility closures
Estimated Revenue Loss $ (3,000,000)
Table 2: FY 2020-21 Sportsplex and Visitors Bureau Revenue Losses
COVID-19 Recession Impacted Revenues Notes
Sportsplex Fees $ (1,400,000) Closures due to health protocols
Visitors Bureau Occupancy Tax $ (600,000) Decreased travel and lodging
Estimated Revenue Loss $ (2,000,000)
The estimated revenue losses are consistent with the First Quarter and Second Quarter report estimates. The
revenue declines are expected to stabilize as this fiscal year ends. The attached UNC-Charlotte Economic
Forecast points to increasingly improved economic outlook as vaccinations expand and Executive Order 204
continues easing North Carolina public health restrictions.
1
2
The Round 2 CARES Funding, American Rescue Plan Act, Online sales and increasing business occupancy limits
has all helped our Sales Tax revenues.
Table 3 illustrates that Sales Tax revenue trend is assisting in offsetting declines in Charges for Services (Federal
Detention, Planning and Inspection and DEAPR revenues) as summarized in Table 1. The General Fund
projection remains at breakeven results with emergency measures and projected salary savings.
Table 3: General Fund Summary
FY 2021 FY 2020 FYs 2021 vs 2020
GENERAL FUND Original Revised YTDActuol* Percents YTDActual* Percenta VTD %
Property Tax $167,694,880 $167,694,880 $164,375,915 98.02% $160,573,078 97.23% $3,802,837 0.79%0 1
Sales&Use Tax $23,827,353 $23,827,353 $14,196,151 59.58% $13,434,121 52.95% $762,030 6.63%0
Licenses and Permits $274,550 $274,550 $136,322 49.65% $131,627 42.02% $4,695 7.63%
Charges for Services $12,645,090 $12,645,090 $7,029,219 55.59% $8,988,639 70.56% -$1,959,420 -14.97%/ Z
Intergovernmental $17,710,005 $24,990,284 $14,920,894 59.71% $9,678,552 50.65% $5,242,342 9.06%/
Transfers In $5,486,817 $5,511,817 $0 0.00% $0 0.00% $0 0.00%� 3
Miscellaneous $3,139,009 $3,518,398 $7,090,826 201.54% $6,354,794 159.10% $736,032 42.44%/ 4
Appropriated Fund Balance $8,268,603 $7,812,302 0 0.00% 0 0.00% 0 0.00%
Total $239,046,307 $246,274,674 $207,749,326 84.36% $199,160,811 82.94% $8,588,515 1.41%49
Community Services $14,322,250 $15,108,168 $9,804,102 64.89% $10,062,766 67.74% -$258,664 -2.84%0
General Government $10,525,739 $11,158,056 $7,904,647 70.84% $7,749,597 71.57% $155,050 -0.73%*
Public Safety $27,994,203 $28,456,670 $21,454,129 75.39% $18,739,293 68.05% $2,714,836 7.35%/ s
v Human Services $41,614,328 $43,919,633 $27,049,977 61.59% $27,380,870 64.78% -$330,893 -3.19%
CL Education $93,440,414 $93,809,052 $68,971,146 73.52% $67,734,927 72.44% $1,236,219 1.09%/
W Support Services $12,773,209 $14,396,301 $12,562,715 87.26% $8,986,456 73.17% $3,576,259 14.10%/ e
Debt Service $33,410,925 $33,410,925 $32,745,297 98.01% $30,207,453 98.22% $2,537,843 -0.21%41
Transfers Out $4,965,239 $7,266,129 0 0.00% 0 0.00% 0 0.00%o
Total $239,046,307 $247,524,934 $180,492,013 72.92% $170,861,362 71.16% $9,630,651 1.76%40
Notes:
*-Actual amounts include Encumbrances.
+-Based on percentage.
1-Real and Personal on target with budgeted amounts;remaining amounts are for Motor Vehicle Taxes
2-Declines primarily due to Federal Detention,Planning and DEAPR Fees.
3-Transfers will be completed at year-end and include$4 millon from Capital Reserves and Article 46 and Solid Waste Funds.
4-Miscellaneous includes Hold Harmless Sales Tax,lease rentals,donations and interest earnings.
5-Public Safety includes Emergency Services COVID-19 Contract Services and Non-Congregate Sheltering
6-Support Services includes$1.9 million Healthcare expenses now budgeted in General Fund and Town CARES expenses.
General Fund revenues are 84.3% of budgeted revenues compared to 82.9%the prior fiscal year. The variance
is due to FY 2020-21 Intergovernmental revenues which includes CARES Round 1 ($2.6 million) and CARES
Round 2 ($2.8 million) grant amounts.
General Fund Revenues
2
3
• Property Tax collections are 98% of the total Property tax budget compared to 97.2% the prior fiscal
year. Real and personal taxes collections peaked at the end of December prior to the January
assessment of penalties and interest. The remaining property taxes include delinquent taxes and the last
three months of motor vehicle tax revenues.
• Sales Tax for Articles 39, 40 and 42 are 59.5% of the budget as compared to 53% in the prior fiscal year.
The amounts listed above includes collections for six months (July through December); there is a three-
month revenue lag from the NC Department of Revenue (NCDOR). This sales tax distribution reflects
the State easing public health protocols and strong Federal economic stimulus intervention.
As a result, sales tax revenues are projected to exceed the budgeted amount. NCDOR has yet to adjust
the County's distributions for taxpayer refunds, therefore this is factored into the FY 2020-21 estimate
of$27.2 million in Table 4 below:
Table 4: Sales Tax Performance
FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Budget FY 2020-21 Estimate
$25.6M $27.8M $28.1M $25.9M $27.2M
Percent Change 8.4% 1.0% -9.0% 6.5%
• Charges for services are 55.5% of the budget as compared to 70.5% lower the prior fiscal year. The
decline is attributed to COVID-19 public health measures for inmate inhabitants at the County Detention
Center which reduced population and commensurate cost recovery from the Federal Government.
Aging, Animal Services and DEAPR, Planning and Inspection fees are lower as well due to COVID-19
related revenue impacts as indicated previously. As noted earlier the full impact is projected between
$1.5 million to $2 million.
• Miscellaneous revenue includes primarily NCDOR Hold Harmless Sales Tax revenue, Facility Rentals and
Donations.
General Fund expenditures are 72.9% of budgeted expenditures as compared to 71.2%the prior fiscal year.
The variance is attributed to debt service, emergency services COVID-related contracted services and
reclassified non-departmental retiree health care benefits previously paid from the Health and Dental Fund.
General Fund Expenditures
3
4
• General Government third quarter expenditures represented 70.8% of the total general government as
compared to 71.5%the prior fiscal year. The variance is attributed lower workers compensation and
salary attrition savings.
• Human Services third quarter expenditures represented 61.5% of total human services expenditures as
compared to 64.7%%the prior fiscal year. Department of Social Services expenditures for Foster Care
Board, Adoption Assistance Permits and OPC Mental Health account for the variance from the prior
fiscal year.
• Public Safety expenditures represented 75% of total public safety expenditures as compared to 68% the
prior fiscal year. The increase is attributed primarily to Emergency Service expenditures for non-
congregate care housing, food insecurity, vaccine support and other emergency related expenditures
for residents impacted by the COVID-19 pandemic. Pursuant to the County's March 2020 Emergency
Declaration these expenditure are eligible for federal and state reimbursements. Budget Amendment 12
will transfer these expenditures to the County's COVID Emergency Fund from the General Fund.
• Support services expenditures represented 87.2% of total support service as compared to 73.2%the
prior fiscal year. The increase reflects $1.3 million in Round 2 CARES funds paid out of a Non-
Departmental to the towns and $1.9 million in Retiree Health fund post-employment benefits are now
paid from the General Fund this fiscal year rather than the Health and Dental Fund in the prior fiscal
year.
• Education expenditures represented 73.5% of its budget as compared with 72.4%the prior fiscal year.
School appropriations are paid to both School systems by the 151" of each month. The remaining
Education budget includes School Health and Safety Contracts, Deferred Maintenance, Durham Tech
Current Expense and Recurring Capital. Through FY 2020-21 third quarter, the County has remitted $1.2
million of the $3.6 million budgeted for School Health and Safety Contracts. Chapel Hill-Carrboro City
Schools received two quarters of Nurses Contract payments totaling $686,391. Orange County Schools
received two quarters of Nurses Contract payments totaling $494,603. CHCCS had a partial payment of
$63,400 for School Resource Officers.
• Third Quarter debt service represents 98%% of total debt service similar to the prior fiscal year. The
County has remaining April 1 and May 1 debt service payments for the remainder of the fiscal year.
• The remaining Functional Leadership teams are consistent with historical spending rates and compliance
with the County's proactive measures in response to the COVID related economic crisis.
4
5
The following table provides an overview of the other County operating funds. Further discussion on the
Sportsplex and Visitors Bureau Funds are highlighted given the impact of the COVID-19 public health protocols
on the revenue streams.
Table 5: Summary of Other Funds
FY 2021 FY 2020 FYs 2021 vs 2020
OTHER FUNDS Original Revised YTDActual* Percents YTDActual* Percenta YTD
Multi-Year Community Development F $1,899,076 $10,165,485 $3,054,805 30.05% $385,483 21.36% $2,669,322 8.69%■ 1
33-Housing Fund $4,448,289 $4,621,914 $3,209,834 69.45% $3,259,182 63.02% -$49,348 6.43%0 2
3 35-Emergency Telephone Fund $755,471 $755,471 $503,647 66.67% $382,150 48.87% $121,497 17.80%40 3
37-Visitor's Bureau Fund $1,621,017 $1,990,521 $911,073 45.77% $1,667,877 70.41% -$756,804 -24.64%19
> 38-Spay/Neuter Fund $82,350 $82,350 $47,997 58.28% $31,586 32.61% $16,411 25.67%40
cc 50-Solid Waste Enterprise Fund $12,092,884 $12,092,884 $10,543,813 87.19% $10,425,047 82.89%
$118,766 4.30%40
53-Sportsplex Fund $3,796,991 $3,796,991 $1,805,920 47.56% $2,925,460 63.88% -$1,119,540 -16.32%194
70-Employee Health&Dental Fund $14,085,214 $14,085,214 $9,594,159 68.12% $8,757,557 51.17% $836,602 16.94%19
Multi-Year Community Development F $1,899,076 $10,165,485 $5,665,876 55.74% $987,146 54.70% $4,678,730 1.03%06
33-Housing Fund $4,448,289 $4,633,566 $3,403,934 73.46% $3,182,204 61.53% $221,730 11.93%
35-Emergency Telephone Fund $755,471 $755,471 $662,961 87.75% $521,770 66.72% $141,191 21.03%0 6
;v
r 37-Visitor's Bureau Fund $1,621,017 $2,031,277 $1,671,323 82.28% $1,545,995 65.26% $125,328 17.02%197
38 Spay/Neuter Fund $82,350 $104,779 $73,706 70.34% $45,731 47.22% $27,975 23.13%19
W 50-Solid Waste Enterprise Fund $12,092,884 $12,621,089 $7,051,237 55.87% $7,225,913 57.46% -$174,676 -1.59%�
53-Sportsplex Fund $3,796,991 $4,350,817 $2,111,497 48.53% $2,417,877 52.80% -$306,380 -4.27%0 8
70-Employee Health&Dental Fund $14,085,214 $14,092,720 $9,118,427 64.70% $10,078,381 58.89% -$959,954 5.81%40
Notes:
*-Actual amounts include Encumbrances.
1-Comm. Develop.Revenues;NCORR Hope,NCDHHS,HUD Grants&Town Contributions.
2-Housing Revenues represents Section 8 Voucher revenues.
3-E-911 Revenue increases due to approved E-911 Subscriber Fees.
4-Sportsplex Revenue reflects facility closures due to COVID pandemic..
5-Community Development Expenditures includes Housing Stabilization,Homeless
6-E-911 Expenditures for Motorola Communications,Telphone and call taking equipment.
7-Visitors Bureau Expenditures includes Building Improvements,Building Rentals and
Sportsplex Fund
Sportsplex revenues are 47.7% of budget as compared to 63.8%the prior fiscal year due to the public health
restriction impacts on user fees. Sportsplex expenditures are 48.5% of budget as compared to 52.8%the prior
fiscal year, Sportsplex management implemented cost containment measures to counter the reduced revenues.
FY 2020-21 revenues are $1,805,920 and expenditures are $2,111,497 for the Third Quarter. FY 2019-20
revenues were $2,925,460 and expenditures were $2,417,877 for the Third Quarter.
5
6
The monthly Sportsplex revenues which include ice skating activities and ice rentals below provides
comparative trends for the past two fiscal years and FY 2020-21 Year-To-Date Actuals and Forecasted January
2021 through June 2021 forecasted. As noted the public health restrictions has resulted in a revised revenue
estimate of$2.2 million.
Sportsplex Revenue
$600,000
I
$500,000 —
$400,000
$300,000
$200,000
$100,000
Jul Aug Sept Oct Nov Dec Jan Feb Mar April May Jun
FY 2018-19 FY 2019-20 FY 2020-21
Visitors Bureau Fund
Visitors Bureau revenues are 45.7% of FY 2020-21 budget as compared to 70.4%the prior fiscal year due to the
public health restrictions. Visitors Bureau expenditures are 82.3% of FY 2020-21 budget as compared to 65.3%
the prior fiscal year. FY 2020-21 revenues are $911,073 and expenditures are $1,671,323 for the Third Quarter.
FY 2019-20 revenues were $1,667,877 and expenditures were $1,545,995 for the Third Quarter.
The monthly occupancy tax revenues below provides comparative trends for the past two fiscal years and FY
2020-21 Year-To-Date Actuals and Forecasted January 2021 through June 2021 forecasted. Staff has identified
contractual expenses in the amount of$327,352 to counter declining revenues however Visitors Bureau fund
balance may still be needed. The Visitors Bureau revenue estimate for FY 2020-21 is $1.3 million and is
comprised of occupancy tax revenue of approximately $850,000 and $400,000 in grant revenues.
6
7
Monthly Occupancy Tax
$200,000
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
FY2018-19 FY2019-20 FY2020-21
Solid Waste Fund
Solid Waste revenues are 87% of the total revenues as compared to 83%the prior fiscal year. The solid waste
program fee of$142 is billed as a line item on the Property Tax bill. As noted previously, peak collections occur
by the end of December. Solid waste expenditures are 55.8% of total expenditures as compared to 57%the
prior fiscal year.
Functional Leadership Teams by Department
Community Services-Animal Services, NC Cooperative Extension, DEAPR, Economic Development, Orange
Public Transportation, Planning and Inspections.
General Government- Board of Elections, Clerk to the Board, County Attorney, County Manager, Register of
Deeds and Tax Administration
Public Safety—Courts, Emergency Services, Criminal Justice Resource Department, and Sheriff's Office
Human Services—Department on Aging, Child Support, Housing, Human Rights, and Community Development,
Library, Public Health and Social Services
7
8
Support Services-Asset Management Services, Community Relations, Finance, Human Resources, and
Information Technology
Thanks to the Budget Division for their support in the preparation of this quarterly report.
cc: Bonnie Hammersley, County Manager
8
III 89� THE UNC CHARLOTTE
ECONOMIC FORECAST
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4
FIRST QUARTER REPORT
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■■■ ■■■■ is
UNC C E
BELK COLLEGE of BUSINESS
10
FORECAST
HIGHLIGHTS
Annual Growth Rates In Real GSP
• For 2020, NORTH CAROLINA real GSP is expected to decrease by 2.6
4_
3— percent over the 2019 level.
I
2— S 9 0 S
1 — Z Z Z • Twelve of the state's 15 economic sectors are forecast to experience output
0 — decreases during 2020. The sectors with the largest expected declines are
-1 — 9
Z hospitality and leisure services with a projected real decrease of 27.6 percent,
-2 — other services with a projected real decrease of 10.1 percent, agriculture with a
-3 projected real decrease of 8.2 percent, durable goods manufacturing with a
-4 -
_ projected real decrease of 6.4 percent, and education and health services with a
5 projected real decrease of 5.7 percent.
2017 2018 2019 2020 2021f • For 2020, NORTH CAROLINA establishments are expected to lose 190,700
GSP/Gross State Product is a yardstick that measures net jobs during the year, a decrease of 4.2 percent.
the total output of a state's economy for a given year. It .For 2021,NORTH CAROLINA real GSP is forecast to increase by 5.1 percent
is analogous to the U.S. Gross Domestic Product over the 2020 level.
(GDP).
• Fourteen of the state's 15 economic sectors are expected to experience output
Year-End Seasonally Adjusted North Carolina increases during 2021. The sectors with the strongest expected growth rates are
Unemployment Rates hospitality and leisure services with a real increase of 15.2 percent, agriculture
8 with a real growth rate of 9.2 percent, educational and health services with a
real increase of 7.2 percent, retail trade with real increases of 6.7 percent, and
durable goods manufacturing with a real increase of 6.0 percent.
4 6 •For 2021,NORTH CAROLINA establishments are forecast to add 199,300 net
2 4. 4. 3 3 jobs,an increase of 4.5 percent.
2 0 6
I — i •The North Carolina unemployment rate peaked at 12.9 percent in April and by
2017 2018 2019 2020 2021f December of 2020,the state's unemployment rate had fallen to 6.3 percent.
Quarterly Growth Rates In Real GSP 2020 GSP 11
Gross State Product (GSP) is expected to reach a level of $566,494.2
30- 8 million in 2020. Real (inflation-adjusted) GSP is expected to decrease by
16- 9 2.6 percent over the 2019 level. The Covid-19 shutdown in early 2020
3- £ 6 ended the 10-plus year economic expansion that the North Carolina
0 -3.0 £ economy had experienced since 2010.
3- 0
6- 1 For 2020, first quarter GSP decreased by an annualized real rate of 3.0
9- percent as the Covid-19 response slowly kicked in. During the second
12- - quarter, GSP decreased by an annualized real rate of 31.0 percent, during
30- which the U.S. economy was essentially shutdown by government action.
In the third quarter, GSP increased by an annualized real rate of 36.8
2020 I 2020 II 2020 III 2020 IV percent as recovery began. In the fourth quarter of 2020, GSP is expected
2020 Highlights to increase by an annualized real rate of 3.9 percent.
2020* Percent The North Carolina economy, like the U.S. economy, experienced its
Current Dollars Change biggest decline in GDP since the Great Depression of the 1930s. The
Total Gross Product 566,494.2 -1.0 decline was caused not by an economic disequilibrium, but by a designed
Constant(2012 Dollars) action by the government to shutdown normal economic interaction to
Total Gross Product 499,882.1 -2.6 save lives in response to an unprecedented pandemic. The third quarter
Agricultural 5,023.3 -8.2 recovery of an annualized 36.8 percent, while impressive, did not recover
Mining 630.5 -0.4
Construction 17,055.0 -1.9 the lost GDP experienced during the first and second quarters of 2020. In
Manufacturing 89,110.9 -2.6 fact, by the end of 2020, real North Carolina GDP will be at 98.6 percent
Durable Goods 40,724.3 -6.4 of the real GDP level recorded in the fourth quarter of 2019 before Covid
Nondurable Goods 48,386.6 0.8
TWU 19,118.3 -1.9 hit,
Wholesale Trade 29,857.4 0.7
Retail Trade 28,871.2 -1.9 Going forward, the number one question is how long before the economy
Information 22,523.4 -1.3
FIRE 93,103.9 1.0 gets back to its 2019 level and will the unemployment rate again approach
B&P 67,321.5 -0.9 "full employment." For GDP, the expectation is that North Carolina real
E&H 39,977.0 -5.7 GDP will surpass the fourth quarter 2019 level of real GDP by the second
H&L 13,118.5 -27.6
Services 8,933.8 -10.1 quarter of 2021. Unfortunately, the unemployment rate will take another 6
Government 65,236.4 -1.6 to 12 months before it again approaches 4.0 percent. By December of 2021
it is likely the North Carolina's unemployment rate will still be above 5.0
percent.
*millions of dollars
2020 Total Real GSP Growth -2.6%
1.2 Agriculture -8.2 2020 GSP SECTOR 12
3.9 MT in -1.9 ANALYSIS
3.4 Construction -1.9
The chart to the left presents the projected contributions of each major
8.0 Durables -6.4 economic sector to North Carolina's Gross State Product(GSP). The real
(inflation-adjusted) growth rate for 2020 is forecast to decrease by 2.6
percent. Projected real growth rates for each sector (displayed in black
type) are plotted on the horizontal axis. Projected percentages of GSP
9.6 Nondurables 0.8 contributed by each sector (displayed in green type) are plotted on the
00 vertical axis. The resulting rectangles show the expected weighted
importance of each sector's growth during 2020. All of the sector
6.0 Wholesale Trade 0.7 information presented in the table to the left is based on the new North
American Industry Classification System(NAICS)definitions.
5.7 Retail Trade -1.9
c Twelve of the state's 15 economic sectors are forecast to experience
[� 4.5 output decreases during 2020. The sectors with the largest expected
Information -1.3 declines are hospitality and leisure services with a projected real
0
decrease of 27.6 percent, other services with a projected real decrease of
a� 10.1 percent, agriculture with a projected real decrease of 8.2 percent,
18.6 FIRE 1.0
durable goods manufacturing with a projected real decrease of 6.4
a percent, and education and health services with a projected real decrease
of 5.7 percent.
Seven other sectors are expected to experience GDP declines, but at
13.6 B&P Services -0.9 levels less than the overall 2.6 percent GSP real decline. These sectors
are construction with a projected real decrease of 1.9 percent;
transportation, warehousing, and utilities (TWU) with a projected real
g.0 E&H Services -5.7 decrease of 1.9 percent; retail trade with a projected real decrease of 1.9
percent; government with a projected real decrease of 1.6 percent;
H&L Services - information with a projected real decrease of 1.3 percent; business and
1 Other Services -10..1 professional services with a projected real decrease of 0.9 percent; and
mining with a projected real decrease of 0.4 percent.
Government -1.6
Only three sectors: finance,insurance, and real estate (FIRE);nondurable
goods manufacturing; and wholesale trade are expected to experience
Percent of Real Sector Growth growth in 2020.
Quarterly Growth Rates 2021 GSP 13
in Forecasted Real GSP
5 Gross State Product(GSP) is forecast to reach a level of$601,384.7 million
in 2021. Real (inflation-adjusted) GSP is expected to increase by 5.1
4 percent over the 2020 level. This growth in 2021 will represent the first
3 4.8
year of growth since Covid-19.
4.4 4.3
3.7 For 2021, first quarter GSP is expected to increase by an annualized real rate
of 4.8 percent. During the second quarter, GSP is expected to increase by an
0 annualized real rate of 4.4 percent. In the third quarter, GSP is expected to
2021 I 2021 II 2021 III 2021 IV increase by an annualized real rate of 4.3 percent. In the fourth quarter of
2021, GSP is expected to increase by an annualized real rate of 3.7 percent.
2021 Highlights 2021 starts off after an unexpected weak fourth quarter of 2020. Consensus
estimates going into the fourth quarter of 2020 was that real GDP would
2021* Percent growth between 6 and 8 percent. However, what was unexpected was
Current Dollars Change
Total Gross Product 601,384.7 6.2 another severe spike in cases during the last two months of the quarter. This
resulted in fourth quarter real GDP dropping down to a 4.0 percent growth
Constant(2012 Dollars) rate in the U.S. and an expected 3.9 percent rate in North Carolina. This
Total Gross Product 525,293.6 5.1 experience provide a cautionary note for economists looking forward.
Agricultural 5,484.7 9.2
Mining 614.8 -2.5 While we like to think that driving components of the economy will dictate
Construction 17,672.6 3.6 future growth,we have to realize that the Covid virus will do what it will do
Manufacturing 93,832.6 5.3 and have an overriding impact on future economic activity.
Durable Goods 43,155.0 6.0
Nondurable Goods 50,677.6 4.7
TWU 19,704.0 3.1 Going forward, the good news is that during the first quarter of 2021 the
Wholesale Trade 31,514.5 5.6 fourth quarter Covid virus spike seems to be subsiding. As vaccination rates
Retail Trade 30,808.0 6.7
Information 23,852.6 5.9 rise and the weather starts to warm, it is likely that for a while the Covid
FIRE 97,024.4 4.2 virus will not be the driving force in the economy. North Carolina real GDP
B&P 70,531.2 4.8 should recover to pre-pandemic levels by the second quarter of 2021.
E&H 42,869.3 7.2
H&L 15,113.0 15.2 However, employment level and the unemployment rate will take much
Services 9,393.7 5.1 longer to recover. North Carolina nonagricultural employment should get
Government 66,878.2 2.5 back to pre-pandemic levels by December of 2021. However, the state's
unemployment rate will not get back to full employment (4.0 percent) until
late 2022.
*Millions of dollars
2021 Total Real GSP Growth 5.1%
1.2 Agriculture 9.2 2021 GSP SECTOR 14
0.1 Mining -2.5 ANALY S I S
3.8 TWU 3.1
3.4 Construction 3.6
The chart to the left presents the projected contributions of each major
8.2 Durables 6.0 economic sector to North Carolina's Gross State Product(GSP). The real
(inflation-adjusted) growth rate for 2021 is forecast to increase by 5.1
percent. Projected real growth rates for each sector (displayed in black
type) are plotted on the horizontal axis. Projected percentages of GSP
a 9.6 Nondurables 4.7 contributed by each sector (displayed in green type) are plotted on the
vertical axis. The resulting rectangles show the expected weighted
LJ importance of each sector's growth during 2021. All of the sector
6.0 Wholesale Trade 5.6 information presented in the table to the left is based on the new North
a American Industry Classification System(NAICS)definitions.
5.9 Retail Trade 6.7
Fourteen of the state's 15 economic sectors are expected to experience
4.5 Information 5.9 output increases during 2021. The sectors with the strongest expected
o growth rates are hospitality and leisure services with a real increase of
15.2 percent, agriculture with a real growth rate of 9.2 percent,
P educational and health services with a real increase of 7.2 percent, retail
�
18.5 FIRE 4.2 trade with real increases of 6.7 percent, durable goods manufacturing
960 with a real increase of 6.0 percent, information with a real increase of 5.9
percent, wholesale trade with a real increase of 5.6 percent, and other
services with a real increase of 5.1 percent.
13.4 B&P Services 4.8
Six other sectors are expected to experience growth rates, however, at
levels below the overall 5.1 percent GSP real growth rate. These sectors
8.2 E&H Services 7.2 are business and professional services with a real increase of 4.8 percent;
H&L Services 15.2 nondurable goods manufacturing with a real increase of 4.7 percent;
2.9 finance, insurance, and real estate (FIRE) with a real increase of 4.2
1.8 percent; construction with a real increase of 3.6 percent; transportation,
Other Services 5.1 warehousing, and utilities(TWU)with a real increase of 3.1 percent; and
12.7 government with a real increase of 2.5 percent.
Government 2.5
Only the mining sector is expected to experience a decline during 2021.
Percent of Real Sector Growth
2020 Year-End Employment Trends 2020 EMPLOYMENT 15
0.1 Mining -1.8 SECTOR ANALYSIS
5.2 Construction -2.0 The sector employment analysis presented on this page is based on the
new North American Industrial Classification System (NAICS).
5.5 Durables -7.2 Seasonally adjusted nonagricultural employment in North Carolina
4.6 reached 4,403,200 persons in December 2020, a decrease of 4.2 percent
Nondurables -5.9 over the employment level in December 2019. The state lost 190,700
4.3 Wholesale Trade -0.5 net jobs during the year.
11.3 Retail Trade -0.4 Eleven of the state's 14 nonagricultural sectors of the economy
experienced employment decreases during 2020. The sectors with the
3.9 TWU 5.7 largest employment decreases in 2020 were hospitality and leisure
c 1.7 Information -5.3 services at 20.8 percent, durable goods manufacturing at 7.2 percent,
5.9 FIRE 0.4 and information at 5.3 percent.
W 2020 Employment Highlights
H14.9 B&P Services 1.6 Year-End* Percent
Total Establishment Change
y, Employment 4,403.2 -4.2
Mining 5.5 -1.8
13.5 E&H Services -4.8 Construction 226.8 -2.0
Manufacturing 447.5 -6.6
a Durable Goods 243.5 -7.2
Nondurable Goods 204.0 -5.9
9.5 H&L Services -20.8 Wholesale Trade 188.0 -0.5
Retail Trade 498.0 -0.4
3.6 Other Services -2.5 TWU 171.7 5.7
Information 73.8 -5.3
FIRE 260.6 0.4
B&P Services 654.6 1.6
16.0 E&H Services 592.7 -4.8
Government -3.8 H&L Services 418.3 -20.8
Other Services 158.5 -2.5
Government 707.2 -3.8
Percent of Sector Employment Growth 'thousands of persons
2021 Year-End Employment Trends 2021 EMPLOYMENT 16
0.1 Mining 1.8 SECTOR ANALYSIS
5.1 Construction 3.0 The sector employment analysis presented on this page is based on the
new North American Industrial Classification System (NAICS). North
5.6 Durables 4.9
Carolina employment is expected to reach 4,602,500 persons by
4.7 December 2021, an increase of 4.5 percent over the employment level
Nondurables 5.9 in December 2020. The state is expected to add 199,300 net jobs in
4.1 Wholesale Trade 1.0 2021.
10.9 Retail Trade 1.1 All 14 of the state's nonagricultural sectors of the economy are
expected to experience employment increases during 2021. The sectors
3.8 T 0 8 with the expected strongest employment increases in 2021 are
1.9 information at 16.0 percent, and hospitality and leisure services at 14.9
Information 16.0
5.8 FIRE 3.2 percent.
W 2021 Employment Highlights
H14.7 B&P Services 3.7 Year-End* Percent
Total Establishment Change
y Employment 4,602.5 4.5
i E&H Services 3.0
y Mining 5.6 1.8
�v. 13.3 Construction 233.6 3.0
A-. Manufacturing 471.5 5.4
H&L Services 14.9
Durable Goods 255.5 4.9
Nondurable Goods 216.0 5.9
10.4 Wholesale Trade 189.9 1.0
Retail Trade 503.5 1.1
3.7 Other Services 7.6 TWU 173.0 0.8
Information 85.6 16.0
FIRE 268.9 3.2
B&P Services 678.6 3.7
15.9 E&H Services 610.7 3.0
Government 3.3 H&L Services 480.3 14.9
Other Services 170.5 7.6
Government 730.8 3.3
Percent of Sector Employment Growth `thousands of persons
17
2020-2021 NORTH CAROLINA UNEMPLOYMENT RATE
16.0
14.0
12.0 —
10.0
8.0
6.0
4.0
2.0
0.0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
U.S.Seasonally Adjusted —NC SeasonallyAdjusted Forecast —NC SeasonallyAdjusted
FORECAST reports historical seasonally adjusted monthly unemployment rates for North Carolina and the United States and
forecasts the seasonally adjusted monthly unemployment rate for North Carolina. The seasonal adjustment accounts for variations in
labor market conditions that cause regular fluctuations in the unemployment level each month.
The graph at the top of this page provides a summary of the monthly unemployment rates for 2020 and 2021. The solid blue line
represents the United States seasonally adjusted historic unemployment rate. The seasonally adjusted unemployment rate for the
North Carolina is represented by the solid green line. The North Carolina seasonally adjusted unemployment rate forecast is
represented by the solid red line. The seasonally adjusted rates for the United States and North Carolina can be compared directly
and provide more reliable estimates than the unadjusted rates.
The United States started 2020 with an unemployment rate of 3.6 percent, which fell to 3.5 percent in February. North Carolina
started the year with a 3.6 percent rate of unemployment. Both the U.S. and North Carolina unemployment rates jumped
dramatically in April to 14.7 and 12.9 percent respectively. Since then, both the U.S. and North Carolina rates have fallen
dramatically to 6.7 percent and 6.3 percent by December. The North Carolina rate should decline through the rest of the year and
reach 5.2 percent by December of 2021.
All
The data used in this report comes from the websites for the
Department of • of • •
Analysis (www.bea.gov) and the North Carolina Employment
•ii ��ii ■�■ .��I
Security Commission (www.ncesc.com) as of February 19, 'oil too ■art NOW
2021 .
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