North Carolina’s 2025 Economic Development Tiers

North Carolina’s 2025 Economic Development Tiers & What They Mean for Counties, Landowners, and Growth

The North Carolina Department of Commerce has officially released the 2025 County Development Tier Designations, which are used to determine state funding opportunities and measure county-level economic health. Since 2007, the state has divided its 100 counties into three tiers—Tier 1 (most economically distressed), Tier 2, and Tier 3 (least distressed).

For landowners, developers, and forestry professionals, these designations are more than just numbers on a page. They influence where funding flows, where infrastructure investments are made, and ultimately, where growth and opportunities may appear.

How the Tier Rankings Are Calculated

Under state law (§143B-437.08), each county is ranked annually using four measurable factors:

• Unemployment Rate – average from Nov. 2023 to Oct. 2024
• Median Household Income – from 2022 Census estimates
• Population Growth – July 2020 to July 2023
• Adjusted Property Tax Base per Capita – FY 2024–25 data

Each county receives a ranking (1–100) in all four categories, and the totals are combined into a County Rank Sum, which determines its economic distress rank. Counties are then divided into tiers:

• Tier 1 (Ranks 1–40): Most economically distressed
• Tier 2 (Ranks 41–80): Moderately distressed
• Tier 3 (Ranks 81–100): Least distressed

By statute, 40 counties must be Tier 1, 40 counties Tier 2, and 20 counties Tier 3 each year (with ties defaulting to the lower tier).

2025 County Shifts

This year, 18 counties moved tiers:

Moved Up (less economic distress):

• Tier 1 → Tier 2: Cherokee, Chowan, Duplin, Gates, Jones, Onslow, Pasquotank
• Tier 2 → Tier 3: Granville, Haywood

Moved Down (more economic distress):

• Tier 2 → Tier 1: Alexander, Caldwell, Cleveland, McDowell, Montgomery, Randolph, Surry
• Tier 3 → Tier 2: Camden, Davie

These shifts highlight the dynamic nature of local economies—driven by factors like population movement, industry changes, and storm impacts.

Notable Examples

• Cherokee County rose from Tier 1 to Tier 2 thanks to significant improvements in population growth and household income.
• Alexander and Caldwell Counties slipped into Tier 1 despite income gains, largely due to weakening unemployment and property tax base rankings.
• Haywood County moved into Tier 3, reflecting stronger household income levels despite setbacks in unemployment following Hurricane Helene.
• Randolph and Surry Counties dropped into Tier 1, signaling challenges around declining household incomes.

Why This Matters for Land and Forestry

While these designations often make headlines for business recruitment and state funding, they also have direct implications for landowners and forestry in North Carolina:

• State Incentives: Counties in lower tiers (Tier 1 and 2) often see more state funding for infrastructure and job creation. This can lead to stronger demand for land, from industrial sites to managed timber tracts.
• Land Values: Shifts into less distressed tiers may increase demand (and values) for residential and commercial land, while Tier 1 counties may offer affordability and opportunity for long-term investment.
• Forestry & Natural Resources: Many Tier 1 counties are heavily rural and forested. Increased funding in these areas can support road improvements, rural economic projects, and conservation efforts that directly impact forestry operations.

For landowners, keeping an eye on your county’s tier ranking provides valuable insight into where resources may flow—and how your land could benefit.

The Big Picture

As North Carolina continues to recover from Hurricane Helene and navigate broader economic changes, the 2025 tier designations provide a snapshot of where counties stand today. For those buying, selling, or managing land, these rankings offer another tool for understanding local markets and anticipating growth.

At Carolina Forestry & Realty, we’re committed to helping landowners and buyers make sense of these changes—and seize opportunities where forestry, real estate, and community growth intersect.