Welcome to the October 2026 edition of NC Economy Watch: an update on what’s happening in the North Carolina economy and what it means for you, brought to you by the Labor & Economic Analysis Division (LEAD) of the NC Department of Commerce.
In this edition of NC Economy Watch, we see how the Western North Carolina economy is faring two years after the impact of Hurricane Helene. Although the region has made considerable progress, the situation remains much as it was at the time of our last update: some measures of business activity returned to pre-hurricane levels in the months immediately following the storm, but employment has been much slower to recover, and the region continues to suffer from a downturn in tourism.
The Slow Road to Recovery in Western North Carolina
In September 2025, we concluded that the Western North Carolina economy faced an “incomplete recovery” following Hurricane Helene, arguably the worst natural disaster in North Carolina history. Although the region has made considerable progress two years after the storm’s initial impact, the situation remains much as it was at the time of our last update: some measures of business activity returned to pre-hurricane levels in the months immediately following the storm, but employment has been much slower to recover, and the region continues to suffer from a downturn in tourism.
The first economic indicator to signal a recovery in business activity was data on electricity consumption in the region, which returned to year-ago levels in weather-adjusted terms by December 2024, just two months after the storm’s initial impact. Taxable sales, a proxy for retail sales activity reported by the NC Department of Revenue, was next indicator to bounce back. Taxable sales quickly recovered in Helene-impacted counties and continued to grow over the subsequent months, increasing to 14% above pre-hurricane levels as of June 2026.1
Even as some measures of overall business activity experienced a rapid recovery, the region’s labor market has taken much longer to return to full health. Employment in Helene-impacted counties plunged 5% over the year in October 2024, and while the number of jobs has gradually ticked up since then, employment remained 1% below 2024 levels as of March 2026, the most recent data point available [Figure 1].
Figure 1
There are two potential culprits behind Western North Carolina’s slow employment recovery: a lack of labor supply (not enough workers looking for jobs) and a lack of labor demand (not enough employers looking to hire).
While the region managed to avoid a much-feared population exodus, we now have evidence pointing to a meaningful population slowdown. According to data from the US Census Bureau, the region’s population grew only 0.1% in the year following the storm, compared to a net gain of 0.8% the year before the storm. Meanwhile, data from the US Bureau of Labor Statistics indicates that the region’s labor force shrank by 2.1% in the year following the storm, compared to a 0.2% gain the year prior.2 These two estimates aren’t directly comparable, as they come from different data sources using different methodologies, and it’s difficult to decouple the impact of the storm from the broader slowdown in population and labor force growth happening in North Carolina and the rest of the United States. That said, a smaller labor force means that employers might have a harder time finding the workers they need to fill open positions, which could be contributing in part to Western North Carolina’s employment shortfall.
Most of the remaining job losses are concentrated in Buncombe County, which accounts for 80% of the region’s employment shortfall. Within Buncombe County, home to the city of Asheville, over half the county’s job losses are accounted for by the Accommodation and Food Services sector. This suggests that, in addition to labor supply challenges, the region’s employment shortfall could be explained in part by a persistent lack of demand from Asheville-area hotels and restaurants. Indeed, the latest report from the Buncombe County Tourism Development Authority indicated that lodging sales in July 2026 remained 10% below pre-hurricane levels.
While the progress we’ve seen so far demonstrates Western North Carolina’s resilience, the task of restoring the region’s economy to its full potential remains unfinished. Attracting new residents, engaging displaced workers, and nurturing a recovery in the tourism industry remain key challenges as the region works to achieve a complete economic recovery.
For inquiries and requests, please contact:
Meihui Bodane, Assistant Secretary for Policy, Research and Strategy
NC Department of Commerce, Labor & Economic Analysis Division (LEAD)
- 1
Throughout this article, when reporting data for Helene-impacted counties, we include counties classified by the US Department of Housing and Urban Development (HUD) as “most impacted and distressed” (MID): Ashe, Avery, Buncombe, Burke, Caldwell, Cleveland, Haywood, Henderson, Madison, McDowell, Mitchell, Polk, Rutherford, Transylvania, Watauga, and Yancey Counties.
- 2
These population and labor force changes are measured from July of the previous year to July of the current year.