FILE - In this Sunday, March 21, 2021 file photo, The company logo adorns a sign outside a Toyota dealership in Lakewood, Colo. Toyota has reversed itself and says its political action committee will no longer contribute to legislators who voted against certifying Joe Biden’s presidential election win. The move comes after a social media backlash over the contributions, with threats to stop buying Toyota vehicles. (AP Photo/David Zalubowski, File)
Toyota is building an EV battery plant at the Greensboro-Randolph Megasite near Liberty. (AP Photo/David Zalubowski, File)

GREENSBORO, N.C. (WGHP) – When the North Carolina Department of Commerce’s Economic Investment Committee discusses whether to approve incentives to lure new businesses, an economist always reveals the project’s forecast impact on the state’s gross domestic product (GDP).

For instance, when the state awarded Toyota $271.4 million in incentives a year ago Tuesday – to build a plant for electronic batteries at the Greensboro-Randolph Megasite – that was expected to boost the state’s GDP by $9.6 billion by 2044. The company and the state’s further investments in July would make that number grow even higher.

The latest conception of the Overture from Boom. The jet is to be built in Greensboro. (BOOM SUPERSONIC)

About six weeks later, when Boom Supersonic was given $130 million to build its manufacturing facility at Piedmont Triad International Airport, the impact on the state’s economy was projected to be $32 billion by 2045.

Those are two healthy doses of dollars in a state that finds its GDP to be about $533.09 billion, which is the 10th best among states and more than all but 23 countries, based on figures for 2021.

The U.S. obviously has the largest economy, with its $23 trillion being about 33% higher than China’s No. 2 total of $17.7 trillion and about five times larger than Japan, which is third at $4.937 trillion.

If you were to add the top U.S. states to the list of economies, North Carolina would rank No. 33 in the world. If you were to calculate based on per-capita GDP, North Carolina would produce more than all but 14 countries (more on that later).

You may recall that in July CNBC ranked North Carolina as the No. 1 state for business, saying the state is “turbocharged by a long track record of innovation” and noted political niceties that helped to make the business expansion happen.

“North Carolina is the best place in America to do business and the main reason is our people,” Gov. Roy Cooper said at the time. “This is a great honor, and we’re going to continue to work with our state legislature, businesses, education leaders and employees to build the talented workforce and resilient infrastructure needed to support the high-paying jobs of the next generation.” 

So on the anniversary of the great fanfare of Toyota’s announcement about manufacturing batteries for electric vehicles at the mega site, we offer these half-dozen insights about the health of the state’s economy.

Here is how gross domestic product figures for 2021 compare.

How is gross domestic product calculated, and what information does the state use to project growth?

GDP basically is the “total market value of the goods and services produced by a country’s [or state’s] economy during a specified period of time,” is how Britannica defines it. The formula is: GDP = Consumption + Investment + Government Spending + Net Exports. The NC DOC forecasts GDP growth through a formula developed in 2002 by Michael Walden of North Carolina State University. This formula has been updated annually since it began and was adapted for the Department of Commerce in 2015. The model “estimates income and employment effects (direct, indirect, and induced), calculates expected effects on state expenditures and revenues, and the likely net effect on revenue to the state’s General Fund.” This model includes all state incentives.

What state’s have larger economies than North Carolina?

Based on figures compiled by worlddata.com for 2021, the top 10 are:

California  $3.356.63 trillion
New York$1.985.32 trillion
Florida$1.226.3 trillion
Illinois$938.35 billion
Pennsylvania$839.44 billion
Ohio$736.45 billion
Georgia$683.3 billion
New Jersey$672.09 billion
Washington$667.58 billion
North Carolina$533.09 billion

How do those states compare to the GDP of various nations?

As a rule of thumb, the top 17 economies in the world are at least $1 trillion (the Netherlands is at the bottom of that at $1.018 trillion), and California would rank as the fifth-largest economy in the world. New York would be No. 10. Excluding states, North Carolina would rank No. 24, just behind Belgium ($599.9 billion) and ahead of Thailand ($506 billion). The state has higher GDP than (as examples) Argentina, Norway, Venezuela, Israel, Austria, South Africa, Egypt, Denmark, Vietnam and the United Arab Emirates and twice as much as the bottom three of the top 50 (New Zealand, Portugal, Iran).

This illustration shows microchips made similar to those that will be manufactured in Chatham County. (Photo by Daniel SLIM / AFP) (Photo by DANIEL SLIM/AFP via Getty Images)

How do states and nations rank if you use per-capita GDP?

But when Worlddata calculates the per-capita GDP, the United States’ $69,288 is far from the highest in the world. Ireland’s average is $99,152, and Switzerland’s is $83,457. India has the world’s sixth-largest economy ($3.173 trillion), but its per-capita GDP is only $2,277. North Carolina’s per-capita GDP is $51,362, which is far behind New York’s best average ($76,365), well below the national average and more than only 21 states. Mississippi is at the bottom ($35,374). But there are only 14 countries (excluding states) with higher per-capita GDP than North Carolina. Among the 10 largest, only the U.S. and Canada have higher averages.

Has North Carolina’s GDP always been increasing?

Well, there have been blips on an otherwise steady rise. Statista’s annual tracking shows that the state’s GDP had dipped during the height of the pandemic (2020, as did everyone’s) when it fell to $499.52 billion. But since 2019, when the figure was $514.62 billion, the GDP has grown by about 12%. There was another drop during the Great Recession when output declined by about 9% in 2008 (to $431.96 billion).

So what is the outlook for the future?

The new VinFast VF e35 EV is shown at the AutoMobility LA auto show Wednesday, Nov. 17, 2021, in Los Angeles. (AP Photo/Marcio Jose Sanchez)

Since the announcements of Toyota and Boom, there have been several other economic bonanzas in North Carolina. None was larger than the $854 million the state is investing to help Vietnamese auto manufacturer VinFast build an electric vehicle plant in Chatham County. That’s expected to generate by 2055 an additional $71.6 billion in GDP. Yes, that’s billions with a “b.” Along with that, state and local governments are providing another $750 million or so to Wolfspeed Inc to build much-in-demand microchips (some for those vehicles) in Chatham County. That’s another $17.5 billion to the GDP by 2045.  Those two projects alone would add about 17% to the state’s current GDP. If you are wondering, the Bureau of Economic Analysis says the U.S. GDP rose 3.07% in the third quarter of 2022.