UNCW Business School Professors Predict Continued Growth for Local Economy
10/9/2007 9:05:59 AM
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Wilmington, N.C. - 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.
Dr. William W. Hall Jr., senior economist with the Center for Business and Economic Services at the University of North Carolina Wilmington Cameron School of Business, announced the predictions during the fourth annual Economic Outlook Conference today at UNCW. Dr. Ravija Badarinathi, professor of statistics in the university's 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.
Media contacts:
Dr. William "Woody" Hall, 910.962.3419 or hall@uncw.edu
Dr. Ravij Badarinathi at 910.962.3518 or ravij@uncw.edu
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