SWOT Assessment

Sanford Holshouser used four approaches to gain local leader input into the Cary Economic Development Action Plan. Input from these groups was important to the consulting team in its assessment of the strengths, weakness, opportunities and threats for economic growth.

1. Local Leadership Team: A small, core group of city staff and elected leaders directly concerned with economic development has helped guide the project and review Sanford Holshouser’s draft reports. The Leadership Team has shared information on Cary’s infrastructure, labor force, transportation connections, public works services, etc. as well as quality of life, education, small business development, downtown improvement, tourism and diversity of community involvement.
2. Interview Group: Sanford Holshouser conducted ten one-on-one discussions with governmental, civic, educational and industry/business leaders.
3. Focus Groups: Sanford Holshouser conducted four focus groups as part of this project. One focus group was held with members of the Town’s Economic Development Commission. The other three focus groups included a total of about 25 participants in various occupational or interest fields such as real estate, service providers, local government officials, small businesses, and other interested citizens that the Leadership Team believed should be represented.
4. Online Survey Group: Approximately 138 individual leaders in the community completed Sanford Holshouser’s online survey. The survey was emailed to a Town database list of 2,500 people who were selected by the Leadership Team and represented a cross section of business, community and education leaders and Chamber of Commerce members. The response rate was 5.5%, a reasonable return rate for an online survey.

In addition to gaining input from local leaders, Sanford Holshouser interviewed “outsiders” as well. Interviews were conducted with economic development allies such as the Wake County Economic Development, Research Triangle Regional Partnership, NC Department of Commerce and regional Commerce office, and site selection consultants. The total number of “outsiders” interviewed was 12.

Throughout the entire planning process, Sanford Holshouser reached 185 people for input into the Cary Economic Development Action Plan.

Benchmarking Assessment

Sanford Holshouser contracted with ESRI to provide benchmarking data on Cary, Roswell, Irving, Sunnyvale, Fort Collins, Huntsville and Northern Virginia. ESRI used national data sources like the US Census and made projections. All data sources used by ESRI are documented on the reports attached as Appendix ___ to this report. Sanford Holshouser used the following ESRI reports for this project: demographic and income profile, housing profile, disposable income profile, age by income profile, retail goods and service expenditures, medical expenditures and recreational expenditures.

Target Industry Analysis

Whittaker Associates analyzed growth by industry to determine which industries have been the most successful over the past three years – locally, regionally, and nationally. Industry growth was measured in terms of businesses and employees from 2003 to 2006 at the three levels and national industry employment growth projections were also factored in the analysis. Standard Industrial Classification (SIC) Codes were used for the analysis. National growth projections show that a range of services from transportation and health to communication, along with finance and insurance, are the industries that should expect the greatest growth. The full data and tables of each analysis are included in Appendix C.

Below is a list of the top five growing industries as well as employment in Wake County according to Dun & Bradstreet data for growth changes between 2003 and 2006:

Top Five number of Businesses

1. Hunting, trapping, game propagation (SIC 971)
2. Service industry machinery (SIC 3589)
3. Blast furnaces and steel mills (SIC 3312)
4. Internal combustion engines (SIC 3519)
5. Motorcycles, bicycles and parts (SIC 3751)

Top Five Number of Jobs

1. Switching and terminal services (SIC 4013)
2. Wheat (SIC 111)
3. Livestock services, except veterinary (SIC 0751)
4. Wood office furniture (SIC 2521)
5. Woodworking machinery (SIC 3553)

This list of categories with outstanding employment growth in the county represents a diverse set of industries primarily in services with the exception of woodworking machinery manufacturing.

Taking a broader look at the multi-state Southeastern region, the following growing industries stand out as opportunities for Cary given the local assets and challenges. While some of these industries are not present or growing in Wake County, they are showing growth in the Southeastern region. Cary should consider whether or not there is an opportunity to attract these growing industries.

• Business services (SIC 7389)- increase of 33,914 businesses

• Services (SIC 8999)- increase of 10,878 businesses and 8,215 employees

• Single-family housing construction (SIC 1521)- increase of 6,784 businesses and 21 employees

• Investors (SIC 6799)- increase of 5,454 businesses and 10,217 employees

• Business consulting (SIC 8748)- increase of 5,448 businesses

• Nonresidential building operators (SIC 6512) – increase of 5,003 businesses and 1,201 employees

• Real estate agents and managers (SIC 65331)- increase of 4,783 businesses

• Health and allied services (SIC 8099) – increase of 3,218 businesses and 3672 employees

• Repair services (SIC 7699)- increase of 3,032 businesses

• Management services (SIC 8741)- increase of 2,849 businesses

• Beauty shops (SIC 7231) – increase of 2,620 businesses

• Transportation services (SIC 4789)- increase of 2,511 businesses and 4573 employees

• Management consulting services (SIC 8742)- increase of 2,187 businesses

• Special trade contractors (SIC 1799)- increase of 2039 businesses

• Holding companies (SIC 6719)- increase of 1,931 businesses and 1,879 employees

• Landscape counseling and planning (SIC 0781)- increase of 1,853 businesses

Industries at Risk - While evaluating the growing industries, Whittaker Associates also evaluated industries at risk in the future. Wake County and the Southeastern table were analyzed to determine the industries at risk. Manufacturing, in general, should be of concern for most of the United States. The more a product leans toward a commodity status, the more likely it will be made in the lowest cost location.

Cary should be aware of the industries that are contracting or projected to contract in the future. These industries will be feeling cost and delivery pressures as they compete in an increasingly global market. With that information in hand, Cary can support its local companies in these industry sectors and minimize the losses to the companies and the community. Knowing which industries are projected to decline also provides information on those industries that might be less stable in the long term. When evaluating possible new companies. Cary should take note of the following national industries projected to decline.

Space research and technology

Offices of health practitioners

Asbestos products

Utility trailer rental

Weft knit fabric mills

Dairy product stores

Urban and community development

Administration of educational programs

Based on historical data for the last three years in Wake County and the Southeast, here are areas that are losing businesses or employees.

Wake County Largest Declining Industries

Carburetors, pistons, piston rings and valves (SIC 3592)

Space research and technology (SIC 9661)

Urban and community development (SIC 9532)

Livestock (SIC 5154)

Toys and hobby goods and supplies (SIC 5092)

General livestock (SIC 0219)

Crop preparation services for market (SIC 0723)

Sausages and other prepared meats (SIC 2013)

Platemaking services (SIC 2796)

Household cooking equipment (SIC 3631)

Truck trailers (SIC 3715)

Junior colleges (SIC 8222)

Packing and crating (SIC 4783)

Industrial inorganic chemicals (SIC 2819)

Bank holding companies (SIC 6712)

Luggage (SIC 3161)

Motor vehicle parts and accessories (SIC 3714)

Electric housewares and fans (SIC 3634)

Magnetic and optical recording media (SIC 3695)

Bridge, tunnel, and elevated highway construction (SIC 1622)

Southeastern United States Largest Declining Industries

Space research and technology (SIC 9661)

Silver ores (SIC 1044)

Ferroalloy ores, except vanadium (SIC 1061)

Anthracite mining (SIC 1231)

Dried and dehydrated fruits, vegetables and soup mixes (SIC 2034)

Space vehicle equipment (SIC 3769)

Cellulosic manmade fibers (SIC 2823)

Cane sugar refining (SIC 2062)

Vitreous china table and kitchenware (SIC 3262)

Freight transportation on the great lakes (SIC 4432)

Cookies and crackers (SIC 2052)

International affairs (SIC 9721)

Rice (SIC 0112)

Office machines (SIC 3579)

Rubber and plastics footwear (SIC 3021)

Automatic vending machines (SIC 3581)

Canned and cured fish and seafoods (SIC 2091)

Finance, taxation, and monetary policy (SIC 9311)

Commercial lighting fixtures (SIC 3646)

Deep sea passenger transportation, except ferry (SIC 4481)

New and Expanded Industry Analysis - Conway Data information was analyzed from 1999 through 2005 to determine the new and expanded activity. The announcement data was grouped by the North American Industrial Classification System (NAICS) codes. Tables were created and a list presented of the most active industries in descending order according to the total number of announcements. To be included in the data, the announced projects must have a minimum of $1 million investment, 20,000 square feet of space, or 50 employees. It should be noted that Conway Data compiles the raw data on new and expanded facility announcements as states and communities report the activity. Therefore the data should not be considered all inclusive but a representative sample.

For assessment purposes, the analysis was conducted on the national level, on the Southeastern regional level (North Carolina, South Carolina, Georgia, Alabama, and Florida) and for Wake County. Industries that stand out as active in the Wake County region in the last seven years include Software Development including internet services, Research & Development, Food Manufacturing, Accommodations and Technology.

Even though new and expanded facility activity has declined overall in the last few years, there are industries that still have many facility announcements each year. A few industries, such as Durable Goods, Wholesale Trade, and Food Manufacturing, also increased in activity over the past year. Here is a list of the Southeast’s most active industries.

1. Transportation equipment manufacturing (NAICS 336)
2. Chemical manufacturing (NAICS 325)
3. Plastics and rubber products manufacturing (NAICS 326)
4. Machinery manufacturing (NAICS 333)
5. Professional and technical services (NAICS 541)
6. Fabricated metal product manufacturing (NAICS 332)

It is good to compare the most active industries nationally. Most of the top industries will be the same but in a different order.

1. Heavy construction (NAICS 234)
2. Furniture and related products manufacturing (NAICS 337)
3. Management of companies and enterprises (NAICS 551)
4. Beverage and tobacco product manufacturing (NAICS 312)
5. Machinery manufacturing (NAICS 333)
6. Nonmetallic mineral product manufacturing (NAICS 327)

Economic Profile

Sanford Holshouser used the latest available public data to conduct the analysis. All sources are cited in this report. It is not accurate to compare data from two different sources (example: US Census Bureau and NC State Data Center) as they may have been gathered at different points during the same year and/or use different data gathering methods.

In some cases, due to data availability, statistics for Wake County and the Raleigh Metropolitan Statistical Area are used where Town information was unavailable.

Recommendations

There are occasional points of deviation between the conclusions drawn by participants and our own conclusions based on research, experience and familiarity with nationwide economic development best practices. In each case, Sanford Holshouser takes full responsibility for the findings, conclusions and recommendations made in this report.