Tuesday, October 05, 2010

Experts at the University of North Carolina Wilmington's 7th annual Economic Outlook Conference (EOC) have forecast a surprising outlook for southeastern North Carolina's economy: Total personal income in the Brunswick, New Hanover and Pender Counties will grow 3.3 percent during 2011, slightly more than that forecast for the state (3.2 percent) and the nation (3 percent).

William W. (Woody) Hall, professor of economics and senior economist with the Swain Center for Business and Economic Services at the UNCW Cameron School of Business (CSB), announced the predictions during the annual conference today, Oct. 5, in collaboration with Ravija Badarinathi, professor of statistics in the UNCW Department of Information Systems and Operations Management.

Hall noted that growth in personal income in the three-county region began to slow in 2007. Average growth of around 3 percent for 2008 and 2009 was less than half that of the average of almost 8 percent for the period 1990-2007. Growth of 3.3 percent is forecast for both 2010 and 2011.

Related charts will be available this afternoon on the EOC website: http://www.csb.uncw.edu/cbes/conf/eoc/

Unemployment Up
Unlike recent recoveries, area employment has not rebounded during the current expansion, which officially dates back to the middle of last year. The area unemployment rate has been above 10 percent for 13 of the past 18 months, but has fallen below 10 percent over the last four months. Hall noted that the unemployment rate is a lagging indicator and will likely remain high by historical standards, over the next year. Mid-year 2010 employment levels in area counties were comparable to those that existed five years ago, in 2005.

After dim economic indicators for the past few years, UNCW CSB professors now point to signs that local economic activity is stabilizing. Badarinathi and Hall caution that this forecasted growth assumes no major tropical event or terrorism act for the forecast period. Such unpredictable events could have a significant negative impact on the regional economy.

Retail Sales Rebounded
Area retail sales have been falling since the first quarter of 2008, with the bulk of the reductions occurring during the second half of 2009. Although still below year-earlier totals, sales rebounded over the first half of 2010. Retail trade accounts for 14 percent of total employment in the three-county area.

Real Estate Stabilized
The area residential real estate market may have stabilized, after being hit especially hard during the last recession. Construction employment fell 4.2 percent between 2007 and 2008 and another 7.8 percent between 2008 and 2009. Employment in real estate and rental and leasing fell 5.4 percent between 2007 and 2008 and another 7.4 percent between 2008 and 2009.

After reaching a low point during the first quarter of 2009, sales of existing single-family homes in the three-county area have been relatively stable. At their low point, sales were down more than 70 percent from their peak in the middle of 2005.

Airport Traffic/Room Occupancy Rebounded
Passenger traffic at the Wilmington International Airport has been falling since the third quarter of 2008. The decline was especially strong during the middle of 2009. Although still below year-earlier levels, traffic rebounded during the first half of 2010.

Room occupancy tax collections in New Hanover County have been falling since late 2008. The majority of this decline occurred during the second half of 2009. Although still below the levels from a year earlier, tax collections rebounded during the first half of 2010.

For additional comment:
Hall at 910.962.3419 or hall@uncw.edu
Badarinathi at 910.962.3518 or ravij@uncw.edu