UNCW Business Faculty: Local Economy Will Continue Slow Growth Over the Next Year
Tuesday, October 09, 2012
Total output in the Wilmington Metropolitan Statistical Area (Brunswick, New Hanover and Pender Counties) economy is forecast to grow 1.7 percent during 2013, slightly more than that forecast for the state of North Carolina (1.5 percent), but below that forecast for the nation (2.1 percent).
William W. "Woody" Hall, professor of economics and senior economist with the H. David and Diane Swain Center for Business and Economic Services at the UNCWilmington Cameron School of Business, announced the predictions during the ninth annual Economic Outlook Conference held at UNCW October 9, 2012. Dr. Hall works 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 2.4 percent in 2002 following the relatively mild 2001 recession, annual growth rates fluctuated between 2.9 and 7.6 percent over the period 2003-08. Following a fall of 1.5 percent over 2009, output grew 2 percent over 2010 and 3 percent over 2011and is forecast to grow 1.7 percent over 2012 and 1.7 percent over 2013.
Historical data show that output must grow at least 3 percent per year to keep the unemployment rate stable. Consequently, Hall noted that a likely best-case scenario would be for area county unemployment rates to remain stable over the next 12 to 18 months. The most recent unemployment data show August 2012 seasonally adjusted rates of 11.3 percent in Brunswick County, 9.2 percent in New Hanover County, 11.1 percent in Pender County, 9.7 percent in the state and 8.1 percent in the nation.
The business school professors point to several signs that local economic activity is stabilizing or slowly growing.
Following a substantial decline in monthly sales volume over 2005-08, the local residential real estate sector may have stabilized. However, prices continue to fall but at a slower rate than last year.
After falling during 2008 and 2009, area retail sales rebounded sharply over 2010 and 2011 and have continued to grow through the first half of 2012. For the year ending May 2012 (June 2011-May 2012), sales are up 6.9 percent in Brunswick County, 10.2 percent in New Hanover County, 8.8 percent in Pender County and 6 percent statewide.
Both container tonnage at the state port facilities at Wilmington and passenger and cargo traffic at the Wilmington International Airport have been relatively stable over the past year.
On the downside, the MSA unemployment rate has been above 8.5 percent since year-end 2009. This is the longest period of time that the rate been this high since the mid-1980s.
Employment growth during the current recovery has been anemic compared to the same during the expansion following the 2001 recession. Almost three years following the end of the 2008-09 recession, employment in the MSA is 2 percent higher, compared to 18 percent higher for the comparable period following the 2001 recession.
Badarinathi and Hall caution that this forecasted growth assumes nomajor 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:
Woody Hall, 910.962.3419, firstname.lastname@example.org
Ravija Badarinathi, 910.962.3518, email@example.com
Mark Hurt, 910.962.2091, firstname.lastname@example.org
Andrea Weaver, 910.962.7631, email@example.com