Following a growth of three percent during 2007, the local economy of Brunswick, New Hanover and Pender counties is forecast to expand by approximately three percent during 2008 and five percent during 2009.

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 a news conference today, June 12 at UNCW. Ravija Badarinathi, professor of statistics in UNC Wilmington Cameron School of Business Department of Information Systems and Operations Management, collaborates with Hall on the forecast.

Hall noted that actual economic growth in the local area for 2007 was substantially below that initially forecast (five percent), largely due to lower than expected growth in the fourth quarter of the year. In particular, after removing seasonal variation and adjusting for inflation, retail sales tax collections fell between the third and fourth quarter. This decline was due, at least in part, to historically high gasoline prices, which have reduced household discretionary income. Similarly, employment growth slowed during the latter part of the year, and unemployment rose over the same period. Sales of existing residential structures in the area fell throughout the year.

Reviewing the detailed 2007 data, Hall noted that local economic growth during the first quarter of the year was flat. This was followed by a decline during the second quarter, a rebound during the third quarter and virtually no growth during the fourth quarter. The data for early 2008 shows some momentum, and Hall and Badarinathi predict growth of around three percent over the course of the year. They forecast growth of around five percent for 2009.

Despite historically high gasoline prices, the tourism sector continues to show strength. Hall stated that collections from the first three-percent room occupancy tax levied in New Hanover County grew an average of 8.3 percent per year over the period 2002-07. For the year ending February 2007, these collections are up by 8.5 percent.

Air passenger traffic at the Wilmington International Airport rose by more than 25 percent between 2006 and 2007. For the year ending April 2008, this traffic increased more than 23 percent.

The professors' major hedge is that no large-scale tropical event or act of terrorism occurs during the forecast period, which would dramatically change the economic outlook.

During the press conference, Josh Tobey, a graduate of UNCW's master's program in computer science and information systems, demonstrated a new online database access system for local economic data. The system, which is accessible via a Web site - www.uncw.edu/ncecondata - to both media and the general public, highlights some of the current and historical data on local economic activity maintained by the UNCW Center for Business and Economic Services.

Media contacts for more information or additional comment:

Dr. Woody Hall at 910.962.3419 or hall@uncw.edu

Dr. Ravij Badarinathi at 910.962.3518 or ravij@uncw.edu