Author: Chi Wong and Dylan Craig
Manufacturing continues to be critical to North Carolina’s economy: a previous LEAD Feed blog article reported that in 2024, this sector had an economic output of $108 billion1, accounting for 14.5% of North Carolina’s total Gross Domestic Product (GDP)2. The same data from the Bureau of Economic Analysis (BEA) can be used to look more closely at specific manufacturing subsectors to uncover insightful trends over the last two decades
Which Durable and Nondurable Manufacturing Industries Produce The Most Economic Output?
At a high level, manufacturing industries are divided into durable and nondurable categories. Durable Manufacturing refers to the production of items with a normal life expectancy of three years or more, whereas Nondurable Manufacturing relates to items that generally have a life expectancy of less than three years. This division between durable and nondurable manufacturing can help us understand growth in the overall Manufacturing sector over time. Table 1 presents the top 5 GDP for each of these groupings:
Table 1: Top 5 Durable and Nondurable Manufacturing Industries in North Carolina by 2024 GDP
Source: Bureau of Economic Analysis (BEA), Table SAGDP2
Nondurable Goods Manufacturing (62.6% of NC’s manufacturing output) is considerably larger than Durable Goods Manufacturing (41.3%). Two industries dominate economic output in Nondurable Manufacturing:: (1) Chemical Manufacturing (which includes Pharmaceuticals) and (2) Food and Beverage and Tobacco Manufacturing, which each take up roughly a quarter of Manufacturing GDP. In contrast, output in Durable Manufacturing is much more diffuse, with Machinery Manufacturing, its largest industry, only accounting for 8.2% of Manufacturing’s total output in NC in 2024.
How Has Manufacturing Output Changed Over Time?
Even though Manufacturing is still important to the state’s economy, it used to be an even larger share of output. In 1997, Manufacturing comprised 30.7% of North Carolina’s GDP ; just 7 years later in 2004, that share had shrunk to 24.1%. Figure 1 shows how sectoral output compares to 2004 levels across time:
Figure 1: Manufacturing Real GDP Difference Relative to 2004, 2004-2024
Source: BEA, Table SAGDP9
The data show that while Manufacturing output is very slightly larger than it was 20 years ago, most of the growth happened from 2005-2007, before the Great Recession, and the real output is almost the same as it was in 2004. This is driven by the decline in Nondurable Goods Manufacturing GDP, which is currently 17% below where it was in 2002 and has been steadily declining since 2007. While Durable Goods Manufacturing remains higher than 20 years ago, its lower share of overall GDP and declining trend in the last 7 years mean that these gains are not enough to offset losses in nondurables.
These stagnations and declines are even more pronounced when comparing to national trends. Starting at the sector level, Figure 2 shows that while North Carolina has been gradually losing the large gains made from 2005-2007, U.S. real output in Manufacturing has been gradually increasing since 2009 and is currently roughly 30% larger than it was in 2004:
Figure 2: US vs. NC Manufacturing Real GDP Difference Relative to 2004, 2004-2024
Source: BEA, Table SAGDP9
Zooming in on Durable Manufacturing real GDP trends shows a similar story. Figure 3 illustrates the state is on the verge of seeing less growth than the nation for the first time during this 20 year period:
Figure 3: US vs. NC Durable Manufacturing Real GDP Difference Relative to 2004, 2004-2024
Source: BEA, Table SAGDP9
The biggest difference between nationwide and statewide trends can be seen when comparing Nondurable Manufacturing, as shown in Figure 4:
Figure 4: US vs. NC Nondurable Manufacturing Real GDP Difference Relative to 2004, 2004-2024
Source: BEA, Table SAGDP9
The U.S. and North Carolina followed a similar trend from 2004 to 2012 but diverged after that. Whereas North Carolina continued to see lower output, national real GDP in Nondurable Manufacturing improved -- the most recent levels are roughly 10% above where they were 20 years ago.
Conclusion
Manufacturing remains a cornerstone of North Carolina’s economy, but the mix and momentum have shifted. Nondurables—especially chemicals/pharmaceuticals and food/beverage/tobacco—still dominate output, yet their real GDP has trended down since the late 2000s. Durable Goods Manufacturing has grown over the longer run but softened in recent years. The result is a North Carolina Manufacturing sector that has not kept pace with national growth trends.
These patterns raise as many questions as they answer, particularly about why North Carolina’s path diverged from the nation’s. Prior LEAD Feed analysis of longer‑run changes in manufacturing employment, industry mix, and productivity offers some initial context. In a future article, we’ll explore potential causes – including compositional differences between North Carolina and the U.S., detailed industry growth trends, and shifts in the components of GDP.