Newswise — Following virtually no growth during 2008, the local economy of Brunswick, New Hanover and Pender counties is forecast to expand by approximately one percent over 2009 and three percent over 2010. William W. "Woody" Hall Jr., senior economist with the Center for Business and Economic Services at the University of North Carolina Wilmington's Cameron School of Business during a presentation held June 23.
Hall noted that actual economic growth in the local area for 2008 of 0.75 percent came in at about half of that initially forecast, largely due to declines in several measures of local economic activity over the last three quarters of the year. In particular, after removing seasonal variation and adjusting for inflation, retail sales fell, as did employment and sales of existing single family residential structures. Area unemployment rates are at levels not seen in at least 15 years.
Reviewing the detailed 2008 data, Hall noted that local economic growth during the first quarter of the year was strong. This was followed by offsetting declines during the remainder of the year. The data for early 2009 show some momentum, and Hall predicts growth of around one percent over the course of the year. He forecasts growth of around three percent for 2010. In comparison, the national economy grew 1.1 percent over 2008 but is forecast to decline by three percent during 2009. State economic activity was unchanged between 2007 and 2008; it is forecast to fall by 1.6 percent over 2009.
Hall noted that the weakness in local activity spans a variety of economic sectors, including tourism, car sales and air travel. Receipts from the room occupancy tax levied in New Hanover County have been falling since the fourth quarter of 2008. After peaking in 2006, new vehicle sales have been falling. After peaking in late 2007, air passenger traffic at the Wilmington International Airport has decreased. In addition, unemployment rates have been rising since late 2006 or early 2007.
With respect to the local housing market, Hall noted that after sales peaked during the middle of 2005, they began to fall throughout Southeastern North Carolina. Through late 2008 and early 2009, real estate sales declined by 70 percent in areas served by the Wilmington Regional Association of Realtors (WRAR) and 75 percent in areas served by the Brunswick County Association of Realtors (BCAR). After peaking during the middle of 2007, average home prices are down 20 percent in WRAR areas and 40 percent in BCAR areas.
Hall indicated that signs of strengthening local economic activity include rebounds in retail sales, real estate sales and room occupancy tax collections. He stated that, as a lagging indicator, the unemployment rate is unlikely to improve until sometime after a recovery sets in.
A copy of Hall's presentation is available online at http://www.csb.uncw.edu/cbes/Events/events.htm