In a pandemic year, the county and its municipalities have seen “the lowest of the lows and the highest of the highs,” in the words of Conover City Manager Donald Duncan.
Unemployment reached the highest level recorded in the area last spring. However, the unemployment rate also fell swiftly as restrictions were eased and companies brought back workers.
Leaders who were uncertain about what to expect a year ago are more confident about the state of the local economy and believe the post-pandemic world holds a multitude of opportunities for the region.
Shock and reboundThe onslaught of the pandemic in March 2020 disrupted years of positive economic trends in the area, particularly in employment.
The economic shock sent the unemployment rate in the Hickory-Lenoir-Morganton Metropolitan Statistical Area from 4% in March to 17.6% in April.
Leaders in various communities took action in response.
In Conover, Duncan put a hiring freeze on nonessential positions and limited purchases to emergency needs. The city also halted collection of late fees and disconnections for utilities before the state mandated the practice.
Looking back on that moment, Duncan said it was a scary time and the last quarter of the 2019-20 year was difficult.
“We made budget but just barely,” Duncan said.
Shortly after the first state restrictions were put in place, the Hickory City Council freed up $800,000 in reserve funds.
Hickory City Manager Warren Wood identified $7.7 million in cuts or freezes in the budget for the current fiscal year as Hickory prepared for adverse economic conditions.
Unlike Conover, the city of Newton or Catawba County, Hickory had to lay off employees — six in the parks department and one in the library system.
A year after that chaos began, however, there are clear signs of improvement.
The regional unemployment rate in December — the latest month for which data is available — was 6%, only a few points higher than it was before the pandemic.
Government leaders are also feeling better about local revenue than they were a year ago.
Wood said “the overall revenue picture has not been as dire as what … we have typically seen in a recession.”
He said the city did not even come close to reaching the $7.7 million in losses he planned for. The city’s major revenue sources were also stronger than they were in past downturns.
“I’ve been here through about three or four recessions and generally what we see are large drops in property tax collection, sales tax collection, those sorts of things,” Wood said. “We haven’t seen large declines in that.”
He noted that some revenue sources, such as the occupancy tax the city collects and passes along to the Hickory-Conover Tourism Development Authority and water and sewer fees, did suffer quite a bit.
However, both have rebounded at least to some extent.
The city was also able to use federal funds to recoup water and sewer revenue through a partnership with Greater Hickory Cooperative Christian Ministry. Wood said the water and sewer revenue has since “improved immensely.”
The city has also been able to bring back one parks employee and Wood said he anticipates hiring for positions as restrictions are lifted.
Duncan said “the current economy we’re in locally actually surpasses the economy of the late-90s, which was a boom era here.”
He said sales tax revenue was 12% higher in early March than it was at the same time the previous year just before the economic impact of the pandemic was felt.
Duncan said the only thing keeping the unemployment rate higher than it was before the pandemic is a lag in the service sector.
He said the fact that local governments can now capture sales tax revenue from online purchases was also a major help during the crisis. “I think that kept a lot of local governments from being hit nearly as hard,” Duncan said.
Randy Isenhower, the chairman of the Catawba County Board of Commissioners, said the county has been able to maintain a stable financial position throughout the recession.
“The county has weathered the pandemic well in terms of our fiscal situation,” Isenhower said.
“With the uncertainties of the pandemic, the board took an even more conservative than usual approach to spending in 2020. We delayed some planned expenditures until we had a better idea of the impact of the pandemic on the economy.”
Adapting and overcoming
In the public sector, one of the best examples of overcoming adversity in the past year can be seen in the work going on at the Hickory Metro Convention Center.
More than a week before Gov. Roy Cooper issued the first restrictions, an evangelical conference scheduled for April at the convention center canceled. The direct economic hit from that cancellation was $3,400.
This would not be the last revenue loss the center would experience. The occupancy tax collected by Hickory and Conover that goes to funding the center also dropped significantly.
Numbers provided by the city of Hickory show the occupancy tax it collected in the second half of 2020 was nearly $584,000. The city had collected almost $908,000 during the same period in 2019.
Shows and conferences were halted between March and June. In June, the conference center was able to resume holding smaller scale retail shows. During that period when they could not hold shows, the convention center partnered with Merchants Distributors Inc. to allow the company to use the center for training.
Currently, the convention center is serving as a vaccination site.
Convention center CEO Mandy Hildebrand said the center has upgraded two of its bathrooms to include touchless soap dispensers and sinks.
She added that many people have reached out to reschedule events that were canceled and that the convention center has several things scheduled in the next few months.
“We do really see it coming back and again safely,” Hildebrand said. “We’re taking our temperatures every day. We’re really keeping a monitor of making sure all the doors are wiped down so I believe none of that is going to change because we’re going to continue to do that.”
Catawba County’s economic future
Taylor Dellinger, a data analyst for the Western Piedmont Council of Governments, said one factor that distinguishes this recession from previous ones is the sense of hope among many local leaders.
“If you look at the last two recessions and you were only 12 months into it, there wasn’t nearly the level of optimism that you see currently,” Dellinger said.
He said that Catawba County and the region are likely well positioned for growth into the future because of factors such as the proximity to Charlotte and its growth.
He added that the removal of restrictions in the coming months will also likely bring more people back into the workforce, driving the unemployment rate down even more.
Wood said signs of robust growth in the city are already evident. “Our residential demand is off the charts,” Wood said. “I’ve never seen anything like it. We do believe people are moving here, and we’ve got to find ways to accelerate housing production to meet demand.”
Duncan believes the pandemic will lead to a reawakening of the need to produce more essential products domestically and that the region, with its manufacturing history and base, is in a good place to benefit from that trend.
Leaders do have their concerns.
Wood and Duncan said being able to develop the workforce needed to fill the more than 8,000 vacant jobs in the region remains a challenge as will providing the housing needed to accommodate that workforce.
Isenhower said while it is hard to make long-term guesses about the future, he does have some concerns about the effect school disruptions will have on students down the line.
However, he too was optimistic about the future.
“We are moving forward from a position of strength,” Isenhower said. “I am sure that, as in the past, the citizens of Catawba County will support each other and work together with a positive attitude to continue our good quality of life.”
Kevin Griffin is the City of Hickory reporter at the Hickory Daily Record.