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UNCW Outlook Conference: Local Economy Will Grow Over the Next Year

Tuesday, October 14, 2014

During the University of North Carolina Wilmington’s annual OUTLOOK Conference, Professor William W. (Woody) Hall announced that total real (inflation-adjusted) output in the Wilmington Metropolitan Statistical Area (MSA), composed of New Hanover and Pender counties, is forecast to grow 3.0% during 2014, substantially more than that forecasted for both the state of North Carolina (1.5%) and the nation (2.2%). The MSA economy is forecast to grow 3.3% over 2015.

Hall noted that output growth over the next year should be strong enough to cause an appreciable reduction in the area unemployment rate. The most recent unemployment data for August 2014 showed seasonally adjusted rates of 6.3% in New Hanover County, 7.4% in Pender County, 6.8% in the state and 6.1% in the nation. Although not part of the newly defined Wilmington MSA, the August 2014 seasonally adjusted unemployment rate in Brunswick County was 7.4%. Even though the August 2014 rates were down dramatically from their year-earlier levels, they remain above their 2007 levels, the last year prior to the beginning of the 2008-09 national recession.

Following a substantial decline over 2005-2009, the MSA residential real estate sector has stabilized, with both prices and sales volume apparently having bottomed out. Since the low reached in late 2009, sales of existing single-family homes were up more than 50% as of the second quarter of 2014. Despite this rise, second quarter 2014 sales were slightly more than half their mid-2005 level.

After falling over 2008 and 2009, area retail sales rebounded sharply over 2010-12 and continued to grow, but at a lower rate, through mid-2014. For the year ending June 2014 (July 2013-June 2014), sales were up 4% in New Hanover County, 7.3% in Pender County and 4.3% statewide. They were up 8.2% in Brunswick County for the same period. On an annual basis, sales have more than recovered from their recession losses. The same is true for the travel industry in the MSA.

Employment growth during the current recovery remains very weak compared to the expansion following the 2001 recession. Five years after the end of the 2008-09 recession, employment in the MSA was 7.5% higher, the same as that for the comparable period following the 1990-91 national recession, but well below the 28% increase for the comparable period following the 2001 recession.

After falling between 2010 and 2011, passenger traffic at the Wilmington International Airport has not changed appreciably over the past 36 months.

Following rather large increases over 2009-2011, container tonnage at the state port facilities at Wilmington fell over 2012, rebounded slightly over 2013, and has grown slowly through the first half of 2014.

Hall cautions that this forecasted growth assumes no major tropical event or terrorism act for the forecast period. Such unpredictable events could have a sizeable negative impact on the regional economy.

#CSB