Continued
growth for predicted for local economy
 |
| Dr. Tom Simpson, UNCW Executive in Residence and Retired Advisor with the Federal Reserve, speaks during the 4th Annual Economic Outlook conference held at UNCW Tuesday, Oct. 9, 2007. UNCW/Jamie Moncrief |
The local economy of Brunswick, New Hanover and Pender counties is forecast
to expand by approximately 4.5 percent during 2008, which will likely match
the expected growth for all of 2007. This forecasted growth is more than
double the growth forecast for the state of North Carolina and the nation.
William W. Hall Jr., senior economist with the Center for Business and
Economic Services at UNCW, announced the predictions during the fourth
annual Economic Outlook Conference in October. Ravija Badarinathi, professor
of statistics in the Department of Information Systems and Operations Management,
collaborated with Hall on the annual forecast.
Hall noted that actual economic growth in the local area for 2007 will
likely come in below that initially forecast (8 percent), largely due to
lower than expected growth during the first quarter. In particular, after
removing the effects of seasonal variation and adjusting for inflation,
retail sales tax collections showed mixed results during the first half
of the year.
Similarly, although building activity has rebounded somewhat from its cyclical
lows in late 2006, new construction still lags behind the record levels
set earlier in the current decade. Combined, these two business sectors
account for almost 30 percent of total area employment and more than 25
percent of total labor income. As a result of these events, the local economy
has grown about 5 percent over the last 12 months.
Local economic growth began slowing during the fourth quarter of 2006 and
continued to slow through the first quarter of 2007, Hall said. Some of
this slowdown can be attributed to a reaction to the extremely strong,
non-sustainable growth of almost 7 percent during the second quarter of
2006.
More than 9,600 jobs have been added to the area economy since July 2006
(6 percent increase) with 6,500 of those jobs added since the beginning
of the current year (4 percent increase). The July 2007 seasonally adjusted
unemployment rate for the three-county area was 4 percent, up slightly
from the July 2006 rate of 3.9 percent. New Hanover County had the lowest
July 2007 unemployment rate at 3.6 percent, followed by Pender County with
4.4 percent and Brunswick County with 4.7 percent. The state unemployment
rate was 4.9 percent, and the national unemployment rate was 4.6 percent.
Area unemployment rates have changed very little since 2004.
Construction analysts forecast that at the national level the downturn
in housing will reach its low point no earlier than third quarter 2008.
In his remarks, Hall cited recent figures suggesting that area new residential
construction, as measured by single-family building permit data, may already
be testing a cyclical low.
The professors’ major hedge is that no major tropical event or terrorism
act occurs during the forecast period, which would have a significant impact
on the regional economy.