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Limited optimism in 2012 economic forecast

Posted January 3, 2012

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— Despite Gov. Beverly Perdue's call for optimism in 2012, an economist and a venture capitalist both said Tuesday that North Carolina and the nation face obstacles to growth in the coming year.

Speaking at an annual economic forum sponsored by the North Carolina Bankers Association and the North Carolina Chamber, Appalachian State University economics professor Harry Davis predicted the economy would grow at 2.25 to 2.5 percent in 2012.

Although that's better than the 1.75 percent growth in 2011, Davis said, it's about half of the annual growth rate the U.S. has seen in recent decades.

"Everything is moving in the right direction. It's just moving slower than we're used to," he told hundreds of people gathered at the Sheraton Imperial Hotel.

Perdue told the crowd that optimism was her focus for 2012, calling North Carolina "the state where big ideas turn into reality."

"For the first time since I've been governor, I'm hopeful," she said.

Davis was less hopeful, noting that the home construction industry remains in the doldrums. In previous economic recoveries, the residential housing industry grew by 26 percent, he said, but it's seeing only 6 percent growth now.

"The one engine that's always been there is simply not working," he said.

Other problems include a weak financial sector, sluggish consumer spending as families look to pay down household debt and persistent unemployment, he said.

Economy Economy expected to keep growing, but slowly

Following a recession in the early 1980s, the U.S. created 3 million jobs in 12 months, Davis said, adding that it has taken the nation 30 months to reach that same milestone following the most recent recession.

"A lot of the unemployment we have is going to persist for quite some time," he said. "People do not have the right job skills for match up with (available) jobs."

He predicted North Carolina's unemployment rate would drop from 10 percent to 9.3 percent by the end of 2012 but would remain far above the national rate, which he said would be about 8 percent.

Bob Ingram, a former chief executive of GlaxoSmithKline who now is general partner at Hatteras Venture Partners, said he would like to follow Perdue's call for optimism but said people need to be realistic.

The economy faces headwinds, Ingram said, in the form of demographics, deficits, debt and demagoguery.

An aging population, deficits in the U.S. budget and foreign trade accounts and political gridlock in Washington, D.C., that makes it difficult for businesses to forecast all present obstacles to growth, he said.

"Politicians are posturing on both sides for advantage in the next election," he said. "It's at the expense, frankly, of the welfare of our country."

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  • storchheim Jan 4, 2012

    "Optimism and hard work pay off in the long run." - janey

    No, you also need jobs and cheap, plentiful fossil fuel. Optimism makes life more pleasant but you need a job to pay the bills. As for hard work, you need a JOB to work hard at, unless of course you're one who lives off the hard work of others.

  • Uhavenoclu Jan 4, 2012

    The only 2 things Raleigh NC people think about are Taxes and politics...No wonder your lives are in so much pain and heartache.
    Hate to live in your ghouseholds for i'm sure you take your pains and sufferings on other members of your family and people around you.
    You limit your lives so sure there is no optimism in all you naysayers.
    Don't forget in 11 months it's all going to end so enjoy it,ha ha ha ha .
    Responsibility is not in the materialistic world and how you handle money...Responsibility is how your ability to respond to any situation and sorry but what you going to do about your living thing,will you make it better or just complain?,everyday is real don't run from fear cause better days are very near.

  • cwood3 Jan 4, 2012

    Mike-what America do you live in??? Is see the problem-he's all over the news-every day-talking about what he's doing for(NO TO) you and me. It's even news when he returns from blowing millions of our tax dollars on his golf vacation in Hawaii.

    Obama and Perdue are the problems. More taxes, regulations, spending,name calling, fancy trips, croniism,... Both are incompetent beyond words. Bev, bless her heart, is nothing more than a spokeswoman for the old Dems who have retired to pull her strings!!

    I'm all for change!!! And I'm all for hope!! I hope and pray for a change in the Statehouse and the White House. Anybody would be better than these two clowns!!

  • Bartmeister Jan 4, 2012

    Things you didn't see coming or thought you'd never hear:

    I don't think there will be a lot of progress until President Obama is reelected in November

    Please, hand me that piano...................

    I was thinking about grabbing a wine spritzer and sawing my leg off, wanna go?

    I don't think there will be a lot of progress until President Obama is reelected in November

    I was eating ice cream and the wheels fell of my coffee table

    I don't think there will be a lot of progress until President Obama is reelected in November

    I have evidence that we never went to the moon, rather it was filmed in the basement studio of Elvis Pressley's home in Chicago where he's living with Marylyn Monroe

    OWS is meaningful and has definite direction and purpose

    I don't think there will be a lot of progress until President Obama is reelected in November

  • Uhavenoclu Jan 4, 2012

    We live in a limitless universe even power is limitless. the problem is people limit themselves by how they think and believe.
    we have limitless resources within us to achieve what we desire and dream of
    When you give up your desires and dreams and ways and thinking to another you are giving them power and in essence " Selling your Soul " to another.
    Stop listening to the naysayers who want to bring you down the same path as them and make something of your life.
    You can live or just exist? the choice is yours?

  • Bartmeister Jan 4, 2012

    I don't think there will be a lot of progress until President Obama is reelected in November.
    fayncmik

    That may be the most ignorant statement anyone will read today. Man, I can't believe someone would put that in writing, in public, on a blog page!!!

  • The Yoda Jan 4, 2012

    I don't think there will be a lot of progress until President Obama is reelected in November. says fayncmike

    My god, I know why I come here every morning, when I see the posts of folks like mike, it makes my day, I laugh so hard it brightens my day. It also explains the current state of the DemocRAT party. mike, you need to change your avatar to an empty-headed sheep. LOL

  • Crumps Br0ther Jan 4, 2012

    fayncmike
    I don't think there will be a lot of progress until President Obama is reelected in November. Businesses are afraid of some of some Führer bush clone weaseling his way into the White House

    Business owner have said quite the opposite, they would like him gone so they can move forward without more constrainte put on them by him. But thanks for the Godwin on this thread,shows you have nothing to stand on. When in doubt call someone a racist or a Nazi and you automatically win!

  • tony16 Jan 4, 2012

    "In previous economic recoveries, the housing industry grew by 26% ..."
    Prior to 1980, the housing construction sector was NOT a leading industry in NC. With the LLC developers taking massive profits for years and now going bankrupt and leaving the lenders to clean up the mess, don't wait for this "industry" to rebound. It will remain a shadow of what was. Yes, the recovery, if there is one, will be slow and painful. And until the political gridlock on Jones St. and in Washington dissipates, you can expect more of the same stagnation. Neither the Dems nor Repubs have all the answers. The road to recovery lies somewhere in between.
    But YES, vote out the current Gov. and Pres.

  • fayncmike Jan 4, 2012

    I don't think there will be a lot of progress until President Obama is reelected in November. Businesses are afraid of some of some Führer bush clone weaseling his way into the White House.

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