After years of low unemployment, the Hickory area once again finds itself in a recession.
However, this downturn is different from the one the area experienced following the 2008 economic crisis.
The fall was sharper and deeper than the area saw previously.
Unemployment in the Hickory-Lenoir-Morganton Metropolitan Statistical Area grew from 4 percent in March to 17.6 percent in April, the latest month for which data is available.
The last time the area had unemployment anywhere near that high was in January 2010 when the unemployment rate reached 15.3 percent. The Hickory MSA had the highest unemployment rate in the state for that month.
Taylor Dellinger, a data analyst for the Western Piedmont Council of Governments, said he’s researched records and that’s the highest unemployment rate he’s found, adding that he could not find local unemployment statistics for the Great Depression.
Dellinger said one of the reasons the Hickory area was hit so hard by this downturn was because of the significance of the manufacturing and service industry sectors to the local economy.
Furloughs at furniture plants were a particular driver of unemployment in the area, he said.
Unlike the 2008 recession which had its greatest impact in manufacturing, the current downturn has touched nearly every sector of the economy, Dellinger said.
Even the health care sector took a hit. Dellinger said furloughs and job losses at places like dentist offices and medical practices were part of the equation.
While it took years for the local economy to come back from the previous recession, Dellinger said the existing data indicates the area will see at least some of the lost jobs come back quickly. “I think at least that first half of that loss, that’s going to bounce back really quick,” Dellinger said. “But instead of being flat for a long time and slowly going up it’s probably going to be more like it regains half of it and then the other half is slower.”
Alexander County took the largest unemployment hit of any county in the Hickory MSA. With an unemployment rate of 20.1 percent, Alexander County ranked second in the state in April for highest unemployment behind Dare County.
Craftmaster Furniture, the largest private employer in Alexander County, shuttered its factory from late March to early May. The company paid employees for the first two weeks the operation was closed, Craftmaster CEO Roy Calcagne said.
Workers were furloughed for about three weeks after that and were eligible to receive unemployment. During the furlough period, the company covered employees’ insurance premiums.
The company has resumed production and brought back the more than 600 workers who were furloughed. Craftmaster is currently having its manufacturing employees work 32-hour weeks but the company expects to get back up to 40 hours per week in July, Calcagne said.
Calcagne said business has been steadily getting better since they reopened, which he attributes to the pent-up demand following the shutdown.
He said his biggest worry is what economic conditions will be like later in the year. “Our concern is what’s going to happen come August, September, October,” Calcagne said. “The unemployment number is astronomical nationally so that’s going to impact consumer spending obviously and that’s the unknown.”
Another furniture executive, Alex Shuford III, said his company took a hit and it will take a while for them to recover. Shuford is the CEO of RHF Investments. The company’s division owns brands like Century and Hancock & Moore.
The company is steadily seeing its orders grow after a rough few months.
Prior to the pandemic, the company was exceeding its sales orders from the same period in 2019. By early April, sales orders dropped 80 percent year-over-year, Shuford said.
The company employed a little more than 1,700 people before the crisis but that number dropped below 1,600 following layoffs in April, Shuford said.
Those layoffs were split between the company’s plants in central and western North Carolina, which include locations in Catawba and Alexander counties.
He estimated it would take the company between six months and a year to get back to some sense of normalcy. “The goal isn’t making money in the short term,” Shuford said. “It’s trying to get back up on our feet, get our people back to work.”
He said recent stability in the stock market has been an encouraging sign but that rising COVID-19 cases across the country and the likelihood that a vaccine will not be ready until well into next year are concerns.
Scott Millar, president of the Catawba County Economic Development Corporation, said he was surprised that requests for new projects had not slowed down in the pandemic.
The pandemic has hampered travel but Millar said companies have been able to use virtual technology to do site analysis.
He said the interest from companies likely indicates optimism about the future but he also noted the uncertainties that could affect economic development in the county. “There’s so much unknown,” Millar said. “I think that clearly lack of travel, lack of conventions, lack of restaurant opportunities and social opportunities — I think that those are certainly going to impact us as we market what we’ve got around the world.”
Source: N.C. Department of Commerce Labor and Economic Analysis Division. Data is not adjusted for seasonal trends
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