As the fate of the national economy is debated, the local economy of Brunswick, New Hanover and Pender counties is forecast to expand approximately 2.5 percent during 2008. This forecast by University of North Carolina Wilmington business faculty member William "Woody" Hall Jr. and Ravija Badarinathi is slightly below the expected growth previously projected for 2008. Although low by historic standards, this forecasted growth exceeds that for North Carolina and the nation.

For the past decade, the local economy has out-performed both the state and national economies on most measures. However, in recent quarters, the performance of the local economy has become more aligned with that of the state and nation.

Hall, senior economist with the Center for Business and Economic Services at the UNC Wilmington Cameron School of Business, announced the predictions during the fifth annual Economic Outlook Conference at UNCW. Hall developed the forecast in collaboration with Badarinathi, professor of statistics in the UNCW Department of Information Systems and Operations Management.

Hall noted that actual economic growth in the local area for 2008 will likely be below the 3 percent increase forecasted at the beginning of the summer, largely due to lower than expected growth during the second and third quarters. After removing the effects of seasonal variation and adjusting for inflation, area retail sales tax collections are down. In addition, area sales of existing single-family dwellings have not rebounded from a three-year low reached during the third quarter of 2007.

Although the national economy is declining, nearly 2,500 jobs have been added to the area economy since July 2007, a 1.5 percent increase, with the bulk of the increase occurring since the beginning of 2008.

The July 2008 seasonally adjusted unemployment rate for the three-county area was 5.7 percent. New Hanover County had the lowest July 2008 unemployment rate at 5.2 percent, followed by Pender County with 6 percent and Brunswick County with 6.5 percent. The state unemployment rate was 6.9 percent, higher than the national rate of 5.7 percent. All of these rates are at five-year highs.

Some local sectors have grown over the past year and are projected to show continued growth over the next 12 to 18 months. For the year ending August 2008, air passenger traffic at the Wilmington International Airport is up more than 14 percent, after an almost 27 percent growth in 2007. Room occupancy tax collections for New Hanover County are up almost 3 percent for the year ending July 2008, after rising more than 9 percent in 2007.

Badarinathi and Hall caution that this forecasted growth assumes a return to stable financial and housing markets and the absence of a major tropical event or terrorism act for the forecast period. Such unpredictable events could significantly impact the regional economy.

In addition to this local and regional forecast, Thomas Simpson, executive-in-residence at UNCW in economics and finance, presented an insider's view of the current national economic situation at today's conference. A former member of the Federal Reserve Board, Simpson is an expert on the national and international economies, and has consulted for the central banks of Russia and Iraq.

Copies of the PowerPoint presentations from the Economic Outlook Conference will be available online at www.csb.uncw.edu/cbes after the conference has concluded.

For additional comment:
Hall at 910.962.3419 or hall@uncw.edu

Badarinathi at 910.962.3518 or ravij@uncw.edu

Simpson at 910.962.3511 or simpsont@uncw.edu