Mike Walden's You
Decide: Where's the growth?
Dr. Mike Walden
North Carolina Cooperative
Economists love numbers – some might call it an
occupational hazard. Numbers are our window into the
workings of the economy. Without numbers, we’d have
a difficult time understanding how the economy is
changing, both in positive and negative ways.
But all economic numbers aren’t created equally.
For example, many of the economic statistics
released monthly – such as the job numbers – are
based on statistical samples. This means they are
not 100 percent counts. Anytime a sample is used,
the number will be an estimate, not a certainty.
So when a census -- which is as close to 100
percent count as we get – is released, the
excitement level of economists rises. This was the
case recently when the first numbers came out from
the 2012 Economic Census.
The Economic Census is done every five years and
is, in the words of the U.S. Census Bureau, the
“official five-year measure of American businesses.”
Information is collected from 4 million businesses,
which is more than half of all business operations
in the country. Data about what the business
produces, how much the business produces, the number
of workers employed, and what those workers are paid
are among the items published from the Census.
The just-released 2012 numbers are for the country.
Beginning next year we’ll have individual state
information. So, for now, we’re limited to looking
at national trends.
Comparing the 2012 Census numbers to the
previous 2007 Census numbers is important for one
major reason: The year 2007 was the last year before
the start of the Great Recession, whereas 2012 was a
year in which the economy was recovering from the
Great Recession. Therefore, comparing the two
years allows us to study the impact of some changes
that occurred as a result of that extraordinary
So what are some of the key insights about our
economy from the 2012 Economic Census? Let’s begin
with one of the hottest – and sometimes
controversial – economic sectors: energy. Energy
discovery and extraction has boomed in the last five
years. The value of production is up one-third,
employment is up one-fourth to almost 1 million
workers, and payroll has risen by 50 percent.
Clearly this sector is booming.
Two other big growth sectors have been education
and healthcare. Together the two giants employed
almost 2 million more workers in 2012 than in 2007,
and the number of firms jumped by 60,000. With the
country’s added focus on education and our growing
elderly population, growth should continue in these
The information sector – including publishing,
broadcasting, entertainment production,
telecommunications and data processing – displayed
some interesting trends in the five years between
2007 and 2012. The values of both output and
payroll rose by 15percent, but the number of
information firms, as well as employment, slid. This
economic sector is clearly in a state of flux:
Consolidation is occurring. Also changing are who
produces programming and how programming is
delivered to customers. So there are likely to be
winners and losers in the information sector in the
Both retail and wholesale trade also appear to
be transforming. These are huge sectors employing
more than 20 million people nationwide, but the
number of workers actually dropped between 2007 and
2012, even while sales were increasing. Information
technology is likely impacting retail and wholesale
trade firms, with such technology replacing some
workers. The shift to more on-line buying is also
affecting job opportunities in these firms.
The finance and real estate sectors were still
smaller – especially in jobs – in 2012 than in 2007.
Of course, these sectors were hit hard by the
housing crash, and they have not yet fully
Now what about manufacturing? Manufacturing is
still a vital part of our economy, accounting for 10
percent of all economic activity in the nation and
20 percent in our state. The value of
manufacturing production actually rose between 2007
and 2012 – by a healthy 8 percent. But there were
more than 30,000 fewer manufacturing businesses in
2012 than five years earlier, and jobs were down by
more than 2 million. Manufacturing is continuing its
trend of using more machines and technology and
fewer workers in its production. Also, many
manufacturing firms simply didn’t survive the
There were also big shifts within manufacturing.
Important for North Carolina, textiles, apparel and
furniture all retreated on every measure – number of
firms, value of output, payroll and employment –
between 2007 and 2012. In contrast, food, chemical,
machinery and transportation equipment manufacturing
gained in value of output – although not in numbers
of workers. This says that even for manufacturing
firms that are making and selling more, employment
opportunities may be sparse.
To me there are three big “take-aways” from all
these 2012 Economic Census numbers. First, business
made some gains between 2007 and 2012, despite the
horrific recession. Second, our economy is – as it
always has been – in a state of change and
transformation: Some businesses are expanding while
others are shrinking. Third, output and jobs don’t
necessarily go together. With the
increasing use of machinery and advanced technology,
more of our economy can run without workers.
So, based on these new numbers describing our
economy, are there more sunny or cloudy economic
days ahead? You decide!
Dr. Mike Walden is a William Neal Reynolds Professor
and North Carolina Cooperative Extension
economist in the Department of Agricultural and
Resource Economics of N.C. State University’s
College of Agriculture and Life Sciences. He
teaches and writes on personal finance, economic
outlook and public policy. The College of
Agriculture and Life Sciences communications unit
provides his You Decide column every two weeks.
Previous columns are available at
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