Surging NC economy rises 4 spots to No. 7 in US, says new report

9 June 2022

RALEIGH – North Carolina has one of the best state economies in America, according to a new analysis from financial news and information site WalletHub. And this report is based on data compiled before Meta reportedly is preparing to pick Durham as a home for an expansion project.

Even without Meta, the Tar Heel State continues to punch above its size.  Though the state ranks 9th in population, according to the most recent U.S. Census, North Carolina ranked 7th overall in the new analysis from WalletHub.

That’s up four spots from the 2021 rankings, when North Carolina ranked 11th.  This year’s study measures and analyzes 28 indicators in three broad categories: economic activity, economic health, and innovation potential.  The 2021 study included an additional metric that was related to the COVID-19 pandemic that was removed for the 2022 analysis, a spokesperson for WalletHub told WRAL TechWire.

The study was not published in 2020, and in the 2019 iteration, the state ranked 10th.  In 2017, the state ranked 15th.

NC is the 19th most innovative state, according to WalletHub analysis

How NC compares

Among the 28 indicators measured by the analysts behind the WalletHub report, North Carolina performed best for its ranking on nonindustry research and development investment as a share of the state’s gross domestic product.

In this metric, North Carolina ranked fifth.

The state, which is No. 9 in terms of population, ranks 11th for innovation potential, 12th for economic health, and 14th for economic activity.

Those rankings show good balance compared to other similar states that are often seen as competitors for economic development, including Georgia, Tennessee, and Texas.

Georgia is ranked 8th overall, and is 5th for economic activity but just 24th for innovation potential and 15th for economic health.

Tennessee, which is ranked 11th overall, is 4th for economic activity and 5th for economic health, but 38th for innovation potential.

And Texas, which is ranked 12th overall, ranked 8th for economic activity and 9th for economic health, but 23rd for innovation potential.

Washington state is ranked first overall, and Utah is second.  Other U.S. states that outrank North Carolina in the WalletHub analysis include California, Massachusetts, New Hampshire, and Colorado at third, fourth, fifth, and sixth overall.

A prior analysis from WalletHub ranked North Carolina as the 19th most innovative state.

Study: NC – 9th most populous state – ranks 20th for pandemic recovery

Behind North Carolina’s ranking

The state also ranked highly for activity in building permit issuance, finishing 7th among all U.S. states and the District of Columbia, which was also analyzed in the study.  Building permits are also among the measures included in an economic analysis released periodically by Dr. Michael Walden, an economist and a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University.

And North Carolina ranked 8th overall for the growth in state personal income between 2020 and 2021, with a measured growth rate of 8.9% according to the WalletHub data set, which was shared with WRAL TechWire upon request.  Similarly, the state ranked 8th among all states analyzed for the percentage change in state gross domestic product, or GDP, with an increase of 6.72% between 2020 and 2021.

But where North Carolina could improve is in the relationship between median household income and cost of living, where the state ranked 31st among the 51 areas analyzed.

The state ranks 43rd among all states for the percentage of the state’s population who is uninsured.  Should the state pass the Affordable Care Act’s Medicaid Expansion, said Dr. Anne York, a professor of economics and program director at Meredith College, in a prior interview with WRAL TechWire, “our health rankings would likely improve.”

Another area where North Carolina could improve: the share of the state’s population who is living in poverty, with household income under the federal poverty line.  North Carolina ranked 37th among all states, according to the WalletHub analysis, with the share of poverty measuring 14%.

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