North Carolina has been able to capitalize on a number of factors to drive economic growth, such as a growing number of college graduates, a relatively low cost of living, attractive natural services and a sunny climate. This has allowed the state to transition away from traditional manufacturing as it declined. This is due in part to the free market reforms and fiscally conservative policies that have been implemented in the last decade, making North Carolina an attractive place to live, work, invest and create new jobs. However, two major trade agreements in the 1990s and 2000s, NAFTA (North American Free Trade Agreement) and the WTO (World Trade Organization), have had a significant impact on the state's economy.
These agreements have resulted in much of North Carolina's manufacturing base in textiles, clothing and furniture being outsourced to foreign countries. Economic history is also an important factor in understanding how North Carolina's economy has changed over time. If you look at GDP per capita, North Carolina would rank higher than all but 14 countries. The North Carolina DOC forecasts GDP growth using a formula developed by Michael Walden of North Carolina State University. This formula takes into account the differences between states in terms of geography, natural resources, population density and economic structure. The late 20th and early 21st centuries saw an increase in the relocation of businesses and households.
This has had a positive effect on the state's vehicle parts industry, which supplies automotive assembly factories operating in South Carolina. These five forces have helped to rebuild North Carolina—economically, socially and culturally—over the span of five decades. William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University Michael Walden believes that when he arrived in the state in the 1970s, the “three big industries” of tobacco, textiles and furniture dominated the economy and accounted for nearly a quarter of all economic output. North Carolina had already developed a robust system of public universities to complement its high-profile universities and private colleges. In the most recent iteration of its North American Economic Freedom Index, North Carolina ranked ninth.
