SILER CITY — Updated analysis of Siler City’s economic trends and job market health paints a troubling picture of fiscal instability, according to recent data from a team of experts at the North …
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SILER CITY — Updated analysis of Siler City’s economic trends and job market health paints a troubling picture of fiscal instability, according to recent data from a team of experts at the North Carolina Main Street & Rural Planning Center, a subset of the N.C. Dept. of Commerce.
The findings were presented last Thursday in a regular meeting of the Siler City economic development strategic five-year plan steering committee, the goal of which is to evaluate Siler City’s economic needs and develop a short-term plan of corrective action.
The 11-person committee includes members such as Siler City Commissioner Lewis Fadely, EDC Project Manager Sam Rauf and Chatham Advanced Manufacturing (CAM) megasite owner Tim Booras under advisement from MS&RP economic developers Bruce Naegelen and Ann Bass.
One of the most telling metrics of economic health, according to the MS&RP report, is “retail leakage,” which the report defined as “a statistical tool to help understand the retail dynamics in a certain geography.”
The measurement is also known as “retail gap analysis because it identifies gaps in the retail market where demand for retail goods and services in a specific category is not being satisfied by the existing retail businesses in that geography,” per the report.
Previous data from 2017 showed leakage in excess of $80 million in the secondary trade area of Siler City — a five-to-10-mile radius outside of town — for retail goods plus food and drink sales. Within the primary trade area — meaning downtown and most of Siler City’s shopping areas — more sales had been made in those categories than expected based on population figures.
In 2020, however, that changed.
“What I noticed is that there was sort of an increase in leakage over the past two or three years,” Naegelen said, “and so I thought that was kind of interesting.”
More than $4.6 million leaked from the primary trade area in retail, food and drink sales. In the secondary trade area, the gap exceeded $81 million.
But Naegelen warned against taking aggressive counteraction to rectify some leakage numbers.
For example, “it looks like $12 million (in the primary trade area) or $27 million (in the secondary trade area) in motor vehicles and parts dealers is a lot of leakage,” he said, “… but I wouldn’t go out and recruit a new dealership because they require about $60 million.”
Other industries with significant leakage include clothing and accessories stores; sporting goods, hobby, book and music stores; general merchandise stores; and building materials, garden equipment and supply stores.
In total, between all major industry groups, Siler City leaked $103 million in 2020 between its primary and secondary trade areas.
The figure can seem alarming, Bass and Naegelen admitted, but it should not be used to represent a comprehensive evaluation of the town’s economy.
“It’s a snapshot of a given time,” Naegelen said. “It’s not something that I would go out and start a business on, using that information. But it kind of gives you an idea of some of the potential opportunity.”
But such figures can still be used to inform the town’s economic strategy. MS&RP can “extrapolate” the data, Bass said, to project tangible goals.
The numbers can be used, for example, to “try to get an idea of how many square feet of potential new retail might be supported with the supposed gap,” Bass said. “So, if there was a real interest in doing that, and maybe if retail comes up as one of your categories that you want to develop further, these numbers can be more useful. And Bruce has more at other levels, as well, that we can use for a little more examination.”
Members of the Siler City economic development strategic five-year plan steering committee are currently reviewing MS&RP’s report and are expected to discuss its findings further in the committee’s next meeting on Jan. 21.
Reporter D. Lars Dolder can be reached at firstname.lastname@example.org and on Twitter @dldolder.