UNCW Economic Experts: Local Economy Will Grow Slowly Over the Next Two Years
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Thursday, March 15, 2012
Wilmington, N.C. - Southeastern North Carolina economic expert William W. (Woody) Hall forecast that the total output of the Wilmington Metropolitan Statistical Area (Brunswick, New Hanover and Pender Counties) economy will grow 2 percent during 2012. This projected growth is slightly more than that forecast for the state (1.7 percent) and the same as that forecast for the nation. The local economy is forecast to grow 3.2 percent in 2013.
The announcement was made at the bi-annual Joint Economic Growth Summit Conference on the morning of Thursday, March 15 at the University of North Carolina Wilmington. The event was co-sponsored by UNC Wilmington and South Carolina's Coastal Carolina University.
Hall, professor of economics and senior economist with the H. David and Diane Swain Center for Business and Economic Services at the UNCW Cameron School of Business, developed the forecast in collaboration with Ravija Badarinathi, professor of statistics in the UNCW Department of Information Systems and Operations Management.
Hall noted that output growth has been volatile since the beginning of the decade. After falling 4.6 percent in 2002 following the mild-2001 recession, annual growth rates fluctuated between 1.1 percent and 6.9 percent over the period 2003-07. Following virtually no change during 2008, output fell 1.5 percent in 2009. Economic activity rebounded in 2010 with a growth of 2 percent, followed by growth of 3.8 percent in 2011. Activity is forecast to grow 2 percent in 2012 and 3.2 percent in 2013.
Historical data shows that output must grow at least 3 percent per year to keep the unemployment rate stable. Consequently, Hall noted the best-case scenario would be for area county unemployment rates to remain stable over the next 12 to 14 months. The most recent unemployment data shows 2011 average monthly unemployment rates of 10.9 percent for Brunswick County, 9.6 percent for New Hanover County, 11.4 percent for Pender County, 10 percent for North Carolina and 9 percent nationwide.
Unlike the other recessions of the past two decades, the employment rebound following the end of the 2008-09 national recession has been extremely weak. Ten quarters following the end of that recession in mid-2009, employment in the MSA was 97 percent of its level at the end of the recession. The average MSA monthly employment rate of 157,400 during 2011 was 6 percent below its most recent peak of 167,600, reached in 2007.
There are signs supporting a slowly recovering regional economy.
Following a dramatic decline in monthly sales volume over 2005-2008, the local residential real estate sector may have stabilized. After reaching their recent lows in late 2008/early 2009, sales have been relatively stable.
After falling during 2008 and 2009, area retail sales rebounded sharply over 2010 and 2011. The retail trade sector supports more than 14 percent of total employment in the MSA. Collections from the room occupancy taxes levied in New Hanover County have recovered from large declines in 2008 and 2009. Similarly, container tonnage through the state port facilities has increased noticeably since 2008.
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.
For additional comment:
Hall at 910.962.3419 or email@example.com
Badarinathi at 910.962.3518 or firstname.lastname@example.org