Ahead of the NC Chamber’s Economic Forecast Forum: 5 Things to Know About North Carolina’s Economy in 2026
As business and policy leaders gather Monday at the NC Chamber and North Carolina Bankers Association’s 24th Annual Economic Forecast Forum to discuss growth and competitiveness, it’s important to ground the conversation in how the economy is actually working for people across the state — and what risks lie ahead.
Here are five things to know about North Carolina’s economic outlook as 2026 begins:
1. Everyday life is increasingly unaffordable for North Carolinians
For most households, the cost of the basics continues to rise faster than incomes. Affordability pressures are shaping everything, from workforce participation to family stability, and remain a central constraint on economic well-being statewide.
- Average weekly wages in North Carolina remain below a Living Income Standard.
- Costs for essentials like housing, child care, and food have risen faster than wages for too many workers in the past few years. From June 2024 to June 2025, costs of housing (3.8 percent), and energy (6 percent) grew faster than average wages for North Carolina workers (3.5 percent).
- Policy choices — not market forces — are a key driver of affordability outcomes in North Carolina. Federal policy changes are actively increasing costs for families, including higher health care expenses tied to the cancellation of enhanced premium tax credits (EPTCs) that help people afford health insurance through the Affordable Care Act marketplace.
Background:
- https://ncbudget.org/beyond-the-census-data-how-policy-shapes-well-being-in-nc/
- https://ncbudget.org/the-price-of-hr1-the-harmful-federal-megabill-how-its-costing-north-carolina-families/
- https://www.bls.gov/charts/county-employment-and-wages/percent-change-aww-by-state.htm
Policy options in 2026:
- Pass a budget that addresses major affordability challenges facing families in child care, housing, food and health care.
- Fund investments in families and communities by stopping the scheduled income tax cuts for profitable corporations and the wealthy.
2. Wage growth has been uneven, widening inequality across the workforce
Even as headline economic indicators remain strong, paychecks for most workers fall short of what’s needed to meet basic needs in their communities.
- Wage growth has been uneven, with lower- and middle-income workers seeing far smaller gains than those at the top. Since 2000, the real wages of those in the top 10 percent of incomes have seen their wages grow twice as fast as the median worker.
- North Carolina is not among the 19 states where the minimum wage was increased on Jan. 1, and the state’s minimum wage remains $7.25/hour.
Background:
- https://www.epi.org/blog/over-8-3-million-workers-will-benefit-from-minimum-wage-increases-on-january-1-nineteen-states-will-raise-their-minimum-wages-heres-where/
- https://ncbudget.org/house-bill-353-fair-minimum-wage-act/
Policy options in 2026:
- Raise the minimum wage and index it to inflation.
3. Policy uncertainty is limiting decision-making and economic progress
Businesses and families alike are navigating growing uncertainty driven by shifting federal policies and state-level inaction — conditions that discourage long-term planning and investment.
- Erratic tariffs and rapidly changing federal policies have caused some businesses to delay or cancel investments, including major projects in the energy sector.
- As implementation of H.R. 1 moves forward in 2026, families face uncertainty around access to the programs and services that support their daily lives and connections to their communities and the economy.
- Federal actions already underway in 2026, such as the freezing for funds for child care, family income supports, and social services, are raising questions about future costs and economic stability.
Background:
- Delayed or canceled energy projects in NC:
- Natron Energy (battery manufacturer) cancels project $1.4B factory, promising 1,000 jobs, due to financing concerns related to federal policy changes in the IRA and tariffs.
- Albemarle Corp. has delayed its Kings Mountain lithium mine amid uncertainty surrounding the $8 million grant it was supposed to receive, changes to IRA tax credits, and tariff policy.
- Pine Gate Renewables has filed for bankruptcy in the face of demand reduction following repeal of IRA tax credits.
- https://www.epi.org/publication/tariffs-everything-you-need-to-know-but-were-afraid-to-ask/
- https://www.cbpp.org/research/federal-budget/implementing-the-harmful-republican-megabill-a-timeline
Policy options in 2026:
- At the federal level, reverse the cost shift to states in food assistance programs and health care.
- Create stability by bolstering investments at the state level in infrastructure and supports for businesses to plan for revenue disruptions.
4. Overall income gains are increasingly concentrated at the top
Economic growth in North Carolina has disproportionately benefited those at the top, a trend reinforced by repeated tax cuts for the wealthy and big corporations.
Data show incomes at the top pulling further away from everyone else.
The latest round of tax cuts continues to funnel gains upward, even as families struggle with rising costs and the state remains without a full budget.
Background:
- https://ncbudget.org/beyond-the-census-data-how-policy-shapes-well-being-in-nc/
- https://ncbudget.org/jan-1-tax-cuts-for-the-rich-in-nc-still-no-state-budget/
- https://ncbudget.org/its-time-for-a-millionaires-tax-in-north-carolina/
Policy options in 2026:
- Create a higher rate on incomes over $1 million to redirect tax breaks to the richest 1 percent from the federal government to new state costs.
5. Communities are less resilient and less prepared for the next shock
North Carolina’s ability to respond to downturns, disasters, or mass layoffs has been weakened just as the need for collective responses is growing.
- In Western North Carolina, limited flood insurance coverage has slowed home rebuilding, with the first homes only completed at the end of 2025. Small businesses impacted by past disasters have spent nearly a year urging the state for recovery grants to maintain operations and employment, with little assistance
- At the federal level, disaster preparedness and response capacity is being reduced through layoffs, grant cancellations, shifting more recovery costs to states, and proposals to make it more difficult to qualify for federal disaster assistance even as climate-driven disasters become more frequent and severe. The cancellation of preparedness and mitigation grants (including BRIC and Hazard Mitigation Grant Program funding) leaves communities more exposed heading into 2026.
- When people lose their job, food assistance provides them with the support to keep food on the table and dollars that are immediately spent locally in the economy providing a stabilizing benefit to the broader community. When people have what they need to meet the basics that keeps our economy moving forward instead of stalling out.
Background:
- https://ncbudget.org/fact-sheet-economic-supports-for-small-businesses-and-unemployed-disaster-survivors/
- https://www.cbpp.org/research/food-assistance/worsening-snaps-harsh-work-requirement-would-take-food-assistance-away
Policy options in 2026:
- Create state infrastructure for long-term rebuilding after disasters and fund priorities for housing and small businesses in Western NC.
- Fund Department of Health & Human Services administration to plan for federal changes to Medicaid and SNAP in H.R. 1 and the specific shift in costs to local governments for the administration of SNAP.
Contact
For additional data, background, or expert commentary on North Carolina’s economy, contact Alex Campbell, Public Policy Analyst at the NC Budget & Tax Center at [email protected] or 919-355-6059. Our experts are available to discuss these issues before and after the forum. We also plan to publish analysis after the forum as well.
For general inquiries, please contact Mel Umbarger, Director of Communications, at [email protected].
