UNC Wilmington Business Faculty: Local Economy Will Grow Faster than State and Nation in 2010
10/6/2009 10:46:24 AM
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The local economy of Brunswick, New Hanover and Pender counties is forecast to expand 4 percent during 2010, more than that forecast for the state of North Carolina (1.5 percent) and the nation (2.1 percent). This forecast, developed by University of North Carolina Wilmington business faculty William W. "Woody" Hall Jr. and Ravija Badarinathi shows especially strong growth during the first half of 2010, followed by more modest growth over the second half. The national, state and local economies are all forecast to exit the recession by late 2009.
Hall, professor of economics and senior economist with the Swain Center for Business and Economic Services at the UNC Wilmington Cameron School of Business, announced the predictions during the sixth annual Economic Outlook Conference at UNCW today, October 6, 2009, in collaboration with Badarinathi, professor of statistics in the UNCW Department of Information Systems and Operations Management.
Hall stated that, unlike during the four previous downturns in economic activity dating back to early 1980, the local economy has been hard hit by the current national recession which dates from late 2007. Local economic activity was virtually flat over 2008 and will likely rise only 1 percent over 2009. The years 2008 and 2009 have shown and will show the lowest growth in the more than two decades in which UNCW business faculty members have been monitoring local economic conditions.
These growth rates stand in sharp contrast to the 5.7 percent annual growth rate from 2002 to 2007. Had it not been for growth during the first and third quarters of 2008, local economic activity would have declined for the entire year. The decline during the fourth quarter of 2008 was noticeably large. Following another decline during the first quarter of 2009, local economic activity rebounded strongly during the second and third quarters of the year. This rebound is forecast to continue during the fourth quarter of the year, but at a lower rate.
Hall and Badarinathi point to several signs that local economic activity is stabilizing. The fall in retail sales is slowing, and sales will likely strengthen by the beginning of the fourth quarter of 2009. After being hard hit during most of 2008, container tonnage passing through the Wilmington state port facilities is rising. Data on residential real estate sales show that this sector likely bottomed out during the first quarter of the year. After reaching historic highs in early 2009, area county unemployment rates have remained stable. Hall noted that the unemployment rate is a lagging indicator and will likely remain high, if not increase, even after a recovery is fully in place. As a measure of the magnitude of the impact of the national recession, second quarter 2009 employment levels in area counties are comparable to those that existed four years ago (year-end 2005).
Badarinathi and Hall caution that this forecasted growth assumes no major 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:
Hall at 910.962.3419 or hall@uncw.edu
Badarinathi at 910.962.3518 or ravij@uncw.edu
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Woody Hall at 2009 Economic Outlook Conference
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