Raleigh: Economy

Major Industries and Commercial Activity

Raleigh and the Research Triangle Park area consistently rank among the nation's best economies year after year. Unemployment remains low and per capita income remains high. Wake County's biggest industries—government, education, and healthcare—are virtually recession proof. Although the region has felt some of the pinch of the nation's economic slowdown, many factors point to Raleigh's continued fiscal health.

Numerous high-technology and medical corporations have been attracted to the Raleigh-Durham area because of the outstanding educational and research facilities at area universities, such as North Carolina State University, which is home to the nation's tenth largest school of engineering, Duke University, and the University of North Carolina-Chapel Hill.

Nearby Research Triangle Park is one of the leading centers for high-technology research and development in the country. Roughly 140 corporate, academic, and government agencies in the Park employ more than 38,500 (plus 5,000 additional contract employees) workers and provide an annual payroll in excess of $2 billion.

Business is booming in Raleigh, both as companies move into the area from other parts of the country and through the growth of home-grown enterprises. In early 2002, Red Hat, the market leader for the Linux marketing system, moved its 630 employees from nearby Durham to downtown Raleigh. Asea Brown Boveri, a $31-billion company that provides large-scale equipment, systems, and services for electric power transmission, continues to expand its presence in Raleigh. The city has witnessed the growth of lower-technology, sophisticated, and highly specialized new manufacturing companies that produce intricate machinery and electronic parts. The Raleigh workforce is fueled by the annual graduation of thousands of students from the area's universities and colleges, and the influx of new residents looking for opportunities.

With excellent road, rail, and air transportation systems, and easier access to the deepwater port at Wilmington as a result of the completion of I-40, Raleigh is a growing distribution center.

Items and goods produced: pharmaceuticals, electronic equipment, electrical machinery, processed foods, metal products

Incentive Programs—New and Existing Companies

Local programs

The Greater Raleigh Chamber of Commerce believes that public funds "should not be used to subsidize a private company's bottom line." The city does not provide free land, free buildings, interest-free loans, direct grants, or preferential tax treatment. However, infrastructure improvements, human capital development, and public financing programs have been put in place to encourage new business development. The chamber's Site Selection Services offers companies considering moving to the city tours, an inventory of facilities, research portfolios, and newcomer assistance. For major corporate relocations, chamber members may provide services to new firms at reduced rates. The chamber, together with MCI Communications Corp and the North Carolina Small Business and Technology Development, has established the MCI Small Business Resource Center, which offers free international trade aid to North Carolina entrepreneurs. Wake County offers Industrial Revenue Bonds and assistance with water and sewer utility expansions. The Capital Economic Development Corporation administers Small Business Administration (SBA) loan guarantee and other financing programs for small business as well as the SBA 503 program for long-term capital asset acquisition.

State programs

North Carolina is one of 22 states with a "right-to-work" law. Several venture capital funds operate in the state and inquiries can be made thorough the North Carolina Council for Entrepreneurial Development. North Carolina offers State Technology Based Equity Funds providing financing for new technology based enterprises, as well as TDA incubators for firms transferring new technologies into commercial applications. The state offers an income tax allocation formula that permits the double weighting of sales in calculating corporate income tax. The North Carolina Department of Transportation administers a program which provides for the construction of access roads to industrial sites and road improvements in areas surrounding major corporate installations. The William S. Lee Quality Jobs and Expansion Act makes available to new and expanding companies tax credits on investment, a jobs tax credit, worker training tax credit, research and development tax credits, and business property tax credits. Additional tax credits are also available for portions of Raleigh and Wake County designated as "development zones."

Job training programs

Screening, testing, and placement services are provided free of cost by the North Carolina Job Service. Extensive, cost-free customized training is provided by Wake Technical Community College for any new or expanding industry that created new jobs. The Capital Area Private Industry Council offers funding for various U.S. Department of Labor on-the-job training programs and youth summer employment programs.

Development Projects

From 1990 to 2002, there were 273 new industries in Wake County, bringing 16,507 new jobs, and 400 expanded industries in Wake County, bringing 31,810 new jobs. In 2003, the Chamber of Commerce assisted 33 new or expanding companies, yielding 677 jobs and $50.9 million in investment. Among companies announcing expansion are Ascom Wireless Solutions, Iams Company, Time Warner Cable, and Relativity. The area continues to be an encouraging place for high-tech entrepreneurial companies, as evidenced by the amount of venture capital that is available. Investors continue to provide funds to companies with a focus on profits. Programs offered by groups such as the Council for Entrepreneurial Development routinely help turn innovative ideas and technological developments into capital-rich companies.

The downtown Raleigh Renaissance, a revitalization process designed to create a stronger and more vibrant downtown, includes three major projects totaling almost $250 million that will move the city toward becoming a more viable meetings destination. A new 500,000-square-foot convention center, a 400-room Marriott headquarters hotel, and the reopening of Fayetteville Street to vehicular traffic are scheduled for completion in early 2008. Progress Energy, one of the country's largest energy providers and the only Fortune 500 company headquartered in Raleigh, plans to build a mixed-use development on approximately 2 acres located east of its current location. The 19-story structure will include three elements: one level of street retail, six levels of parking, and 12 levels of office space.

Economic Development Information: Wake County Economic Development, PO Box 2978, 800 South Salisbury Street, Raleigh, NC 27602-2978; telephone (919)644-7040; fax (919)664-7099. Greater Raleigh Chamber of Commerce, 800 S. Salisbury St., Raleigh, NC 27601; telephone (919)664-7000

Commercial Shipping

Raleigh is an integral part of Norfolk Southern's rail service linking the east coast to Midwest markets and is in the center of CSX's 27,000-mile network serving 22 states and Canada. More than 300 motor freight carriers operate in the area, which has more than 40 motor freight terminals. The city is located within 500 miles of half the population of the United States. The state's 78,000-mile highway network makes the area a highway hub for the Northeast, Mid-Atlantic, and Southeast states, while providing rapid access to Midwest markets.

Labor Force and Employment Outlook

Raleigh-Durham boasts a skilled, educated, enthusiastic, and growing workforce. The economy is thriving and the unemployment rate consistently registers below the national average. The technical and medical industries are in particular need of qualified personnel. Education, services, and whole-sale/retail sectors also offer abundant job opportunities. From 1990 to 2002, there were 273 new industries in Wake County, bringing 16,507 new jobs, and 400 expanded industries in Wake County, bringing 31,810 new jobs. Raleigh was voted the number one city with the happiest workers by the Hudson Employment Index in 2004, and the number one "hottest job market" in Business 2.0 magazine in 2005.

The following is a summary of data regarding the Raleigh metropolitan area labor force, 2003 annual averages.

Size of nonagricultural labor force: 680,700

Number of workers employed in . . .

manufacturing: 69,100

trade, transportation, and utilities: 112,900

information: 22,000

financial activities: 32,200

professional and business services: 101,700

education and health services: 82,100

leisure and hospitality: 1,100

government: 33,200

Average hourly earnings of production workers employed in manufacturing: $14.45

Unemployment rate: 3.3% (December 2004)

Raleigh: Economy

Largest employers Number of employees
State of North Carolina 23,539
IBM Corporation 13,000
Wake County Public School System 12,997
North Carolina State University 7,787
WakeMed 5,000

Cost of Living

The following is a summary of data regarding several key cost of living factors for the Raleigh area.

2004 (3rd Quarter) ACCRA Average House Price: $236,450

2004 (3rd Quarter) ACCRA Cost of Living Index: 97.7 (U.S. average = 100.0)

State income tax rate: Ranges from 6.0% to 7.75%

State sales tax rate: 4.5% (food and prescription drugs are exempt; food sales are subject to local sales taxes)

Local income tax rate: None

Local sales tax rate: 2.0%

Property tax rate: $.95 (combined city and county) per $100 of assessed value (2004)

Economic Information: Greater Raleigh Chamber of Commerce, 800 S. Salisbury St., Raleigh, NC 27601; telephone (919)664-7000. Employment Security Commission of North Carolina, Labor Market Information Division, PO Box 25903, Raleigh, NC 27611-5903