Wednesday, November 15, 2000

WILMINGTON, NC -- Local economic activity is expected to rebound in 2001 according to the results of a study presented by Drs. Claude Farrell and William W. Hall, Jr., professors in the UNC Wilmington Cameron School of Business, at an economic outlook briefing held today.

The economists anticipate a 6 percent increase in local economic activity for 2001 compared to the 3.5 percent growth for 2000. The forecast area included Brunswick, New Hanover and Pender Counties in coastal Southeastern North Carolina. This predicted 6 percent growth will mean that 2001 output in the region will total $7.7 billion.



The economists predict economic growth will return to its long-term trend rate in 2001 following dramatically slower growth in 2000. The low growth in 2000 was due to cyclical factors, most noticeably very slow growth in new construction and to virtually flat retail sales to residents in interior counties by Wilmington and New Hanover County merchants. The extensive flooding during the 1999 hurricane season depressed the economies of these interior counties, and the resulting lower incomes led to fewer retail sales by Wilmington and New Hanover County merchants. In addition, textile operations in some of the counties closed which further depressed the level of local economic activity.



Professor Farrell noted that the “combined impact on local economic activity of the damages caused by the flooding and the textile layoffs led us to cut our forecast for the local economy for 2000 in half from almost 7 percent to close to 3 percent.”



Professor Hall said, “the negative economic effects of the increased tropical storm and hurricane activity have diminished with the passage of time. The absence of any tropical storm activity affecting the area during the 2000 season has given the economies of the hardest-hit counties time to recover. Government grants and secured loans have and will continue to provide an additional stimulus to the economies of these counties for some time into the future.”



The 2001 forecast predicts:



a 2 percent increase in average monthly employment to around 130,000.

a 3 percent drop in the average monthly unemployment to around 5,200.

a 2 percent rise in retail sales to $5.1 billion.

no appreciable change in the average monthly unemployment rate which will remain near its 30-year low of 3.7 percent.

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For additional comment and/or analysis, contact Dr. Farrell at 910/962-3511 (farrell@uncwil.edu) or Dr. Hall at 910/962-3419 (hall@uncwil.edu).