UNCW: Local economy will grow faster than state and nation
WILMINGTON, NC (UNCW NEWS RELEASE) — Good economic news for the region was announced today at the eighth annual Economic Outlook Conference at the University of North Carolina Wilmington, where faculty economists forecast that the Wilmington area will outperform the state and nation in economic growth in the coming year.
Total output in the Wilmington Metropolitan Statistical Area (Brunswick, New Hanover and Pender counties) economy is forecast to grow 2.2 percent during 2012, slightly more than that forecast for the State of North Carolina (1.7 percent) and the nation (1.6 percent).
William W. (Woody) Hall, professor of economics and senior economist with the Swain Center for Business and Economic Services in UNCW’s Cameron School of Business, announced the predictions, which were made in collaboration with Ravija Badarinathi, professor of statistics in the UNCW Department of Information Systems and Operations Management.
Hall noted that output growth has been volatile since the beginning of the decade. After falling 2.4 percent in 2002 after the relatively mild 2001 recession, annual growth rates fluctuated between 2.9 percent and 7.6 percent over the period 2003-08. Following a fall of almost 1 percent over the course of 2009, output grew 2.1 percent during 2010 and is forecast to grow 2.4 percent through 2011 and 2.2 percent by the end of 2012.
Historical data show that output must grow at least 3 percent per year to keep the unemployment rate stable. Consequently, Hall noted that a likely best-case scenario would be for area county unemployment rates to remain stable over the next 12-14 months. The most recent unemployment data show August 2011 seasonally adjusted rates of 11.4 percent in Brunswick County, 10.3 percent in New Hanover County, 12.8 percent in Pender County, 10.1 percent in the state and 9.1 percent in the nation.
The business school professors point to several other signs that local economic activity is slowly growing.
Following a substantial decline in monthly sales volume over 2005-08, the local residential real estate sector may have stabilized. Since reaching recent lows in late 2008/early 2009, housing prices have been relatively stable.
After falling during 2008 and 2009, area retail sales rebounded sharply in 2010 and have continued to grow through the first half of 2011. For the year ending June 2011 (July 2010-June 2011), sales are up 6.4 percent in Brunswick County, 13.1 percent in New Hanover County, 12.6 percent in Pender County and 3.3 percent statewide.
Following a large fall in 2006, passenger traffic at the Wilmington International Airport has been relatively stable. For the year ending August 2011 (September 2010-August 2011), both passenger boardings and deboardings were up more than 3 percent.
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.
Hall and Badarinathi are available for additional comment on issues related to local and regional economic data and trends.
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