North Carolina's unemployment rate is among the nation's highest. Social conservatives have been buoyed by approval of a statewide ban on gay marriage, and Democrats are in disarray while Republicans gain ground in state and local races.
North Carolina had long been in Republican hands but Obama won it four years ago, partly because its demographics have shifted in the Democrats' favor. Obama leveraged those changes by increasing voter registration among young people, minorities and newcomers — and getting them to turn out in force on Election Day.
This year, the president's best way to win North Carolina is by replicating that effort. Obama's team is convinced that a strong ground organization can tip the balance.
"North Carolina, by the way, is exhibit A," Obama told supporters Thursday in a conference call. "Unbelievable work is being done on the grassroots level. You guys are blowing it up when it comes to registering voters."
Two months from Election Day, polls show Mitt Romney pulling ahead. An Elon University/Charlotte Observer poll released this week showed the Republican nominee leading Obama in North Carolina 47 percent to 43 percent. It's unclear whether Obama's Democratic National Convention, staged in the state's largest city over three days, will change that.
The stakes in North Carolina seem higher for Romney than for Obama as both look to cobble together wins in enough states to reach the 270 electoral votes needed for victory.
If Obama loses North Carolina, other states can help him make up for the loss of its 15 electoral votes. For Romney, the state is all but essential.
Obama carried North Carolina by just 14,000 votes in 2008, marking the first time a Democrat had won the state in nearly 40 years.
But unlike four years ago when Obama's candidacy captivated voters across the political spectrum, getting North Carolina backers to the polls this time around may be harder.
In hopes of bolstering those efforts during this week's convention, Democrats hosted a community festival Monday that drew 30,000 people, plus a team of campaign staffers armed with voter registration forms and information on early voting.
The campaign had hoped to replicate those efforts on a larger scale during Obama's acceptance speech Thursday night at a 74,000-seat outdoor arena, but the speech was moved to a smaller indoor arena because of threatening weather. The campaign still has contact information for tens of thousands of people who had tickets to the event.
Jim Messina, Obama's campaign manager, said a robust Democratic ground game in North Carolina could translate into "a point or two difference" on Election Day. That could be all it takes to decide the closely contested battleground.
Republicans see North Carolina as fertile ground for Romney's economic-driven message. The state's unemployment rate is 9.6 percent, fourth highest in the country and more than a point above the national average.
"There is no doubt that the people of North Carolina are not better off today than they were four years ago, which is why we've seen such strong support for Governor Romney," said Robert Reid, Romney's communications director in North Carolina.
Romney got a boost in May when North Carolina voters approved a statewide ban on gay marriage the day before Obama announced his support for same-sex unions. The gay marriage measure helped conservatives organize and step up voter outreach. Some black church leaders, a critical source of support for Obama, spoke out against his decision.
North Carolina's GOP has strengthened during the past two years and could end up controlling all three branches of state government after the November election. North Carolina Democrats have faced a string of troubles, including divisions after Gov. Beverly Perdue decided not to seek re-election after her poll numbers sank. Her withdrawal led party members to take sides in a six-way primary.
Then there's money. Romney's campaign and outside Republican groups spent more than $28 million on television advertising in North Carolina through August. Obama and Democrats spent about $15 million during that same period. Obama's campaign has cut back on its ad buys in recent weeks, a sign that it may see its prospects dimming.
"I just don't see how they make up for what's happened in the past four years in North Carolina," said John Davis, a longtime North Carolina political analyst.
Obama's campaign says it will mobilize a network of campaign workers and volunteers that never shut down after the 2008 election. The campaign has 50 offices across the state, more than double Romney's, and registered 30,000 new voters last month.
Democrats also are promoting early voting, which starts in North Carolina on Oct. 18. Obama would have lost North Carolina in 2008 based on Election Day voting alone, but his overwhelming advantage in early voting was decisive.
Associated Press writers Gary Robertson in Charlotte, N.C, and Thomas Beaumont in Des Moines, Iowa contributed to this report.