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Recovery coming in 2010 for Triangle, other N.C. regions

Posted July 6, 2009

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— Mike Walden, an economist at North Carolina State University, declares in his latest N.C. Economic Forecast that recovery is coming – in 2010.

Walden also notes in an analysis of the seven regions of the state that the Triangle was hardly ‘recession proof” as so many backers have claimed over the years.

His region-by-region look:

RESEARCH TRIANGLE

Unemployment:

2008: 5.3%
Forecast 2009: 9.1%
Forecast 2010: 8.4%

Retail sales:

2008: Down 6%
2009 forecast: Down 15%
2010 forecast: Up 6.5%

Existing home sales:

2008: Down 32.6%
2009 forecast: Down 30%
2010 forecast: Up 12.5%

Overview:

If ever a two-year period conclusively demonstrated the Research Triangle region is not recession-proof, it is the years 2008 and 2009. Although the region eked out a tiny increase in jobs in 2008, the retreat in retail and home sales foreshadowed bad economic news for 2009. Indeed, in 2009, jobs fell by an unprecedented (for the region) 4%, and retail and home sales both pulled back at double-digit rates.

The dynamic Triangle should move forward in 2010, with employment, retail sales, and home sales growth among the leaders in the state. Still, the area’s unemployment rate will remain uncomfortably high at over 8%, and while home sales will rise, a “buyer’s market” in real estate will persist.

EAST

Unemployment:

2008: 6.8%
Forecast 2009: 11.3%
Forecast 2010: 10.8%

Retail sales:

2008: Down .05%
2009 forecast: Down 8.5%
2010 forecast: Up 2%

Existing home sales:

2008: Down 18.1.%
2009 forecast: Down 22%
2010 forecast: Up 5%

Overview:

While the Eastern regional economy didn’t see some of the economic declines registered by other regions, residents certainly know the economy has been in a recession. All three major measures – employment, retail sales, and homes sales – declined in both 2008 and 2009.

Fortunately, 2010 should not add to this record. Gains should be made across the board and the regional unemployment rate will retreat. The military complex centered in Onslow County and the medical industry anchored around East Carolina University will provide the springboard for economic growth in 2010 and beyond.

NORTHEAST

Unemployment:

2008: 7.2%
Forecast 2009: 12%
Forecast 2010: 11.1%

Retail sales:

2008: Down 2.5%
2009 forecast: Down 10%
2010 forecast: Up 2.3%

Existing home sales:

2008: Down 21.8%
2009 forecast: Down 22%
2010 forecast: Up 5.5%

Overview:

The Northeast region entered the recession with the highest unemployment rate among all regions in 2008, and in 2009 that rate became even higher. The increase in the regional unemployment rate since the recession began has been the second-fastest (behind the Southeast) among all regions.

Fortunately, a turnaround is expected for 2010. The regional unemployment rate is expected to fall just shy of one percentage point, yet still leaving the rate above 11%. Modest improvements are also projected for jobs, retail sales, and home sales.

SOUTHEAST

Unemployment:

2008: 6.7%
Forecast 2009: 10.9%
Forecast 2010: 10%

Retail sales:

2008: Down 9.1%
2009 forecast: Down 14.5%
2010 forecast: Up 5%

Existing home sales:

2008: Down 12.5%
2009 forecast: Down 18%
2010 forecast: Up 7.5%

Overview:

Although the Southeast region’s economic numbers look relatively good versus other parts of North Carolina, the picture changes when the region is compared to itself. Yes, the forecasted 10.9% unemployment rate is almost a full percentage point under the state rate for 2009. But since the beginning of the recession, no other region has seen a greater percentage increase in its unemployment rate than the Southeast.

The economic sky should be sunnier – but not with bright sun – for the Southeast in 2010. All the economic numbers will move in a positive direction. Still, compared to past “boom” years, 2010 will feel tepid. Yet most residents will likely take a tepid economy over an ice-cold one!

PIEDMONT

Unemployment:

2008: 6.5%
Forecast 2009: 12.4%
Forecast 2010: 11.9%

Retail sales:

2008: Down 5.8%
2009 forecast: Down 15%
2010 forecast: Up 2.3%

Existing home sales:

2008: Down 21.1%
2009 forecast: Down 27%
2010 forecast: Up 4%

Overview:

The Piedmont Triad region suffered significant losses across all parts of its economy in 2009, at rates worst than the downturns in 2008. The declines in employment and retail sales were second only to those posted by the Charlotte Region.

The good news is that growth should return to the region in 2010. While improvements will be slight, they will be improvements nonetheless. A positive economic outlook for 2010 will aid the region in its continuing transformation from 20th century to 21st century industries.

CHARLOTTE REGION

Unemployment:

2008: 6.6%
Forecast 2009: 12.6%
Forecast 2010: 11.7%

Retail sales:

2008: Down 8.2%
2009 forecast: Down 17%
2010 forecast: Up 4%

Existing home sales:

2008: Down 29.3%
2009 forecast: Down 30%
2010 forecast: Up 10%

Overview:

The Charlotte Region has never seen a downturn like the 2007-2009 recession. The recession struck at the core of the region’s modern economy – financial services, motor vehicle parts, and real estate. A look at the key economic numbers for 2009 – an unemployment rate of 12.6%, a 17% drop in real sales, and home sales off 30% - shows how devastating the economic retreat has been.

It will take several years for the region to recover, but a start will be made in 2010. Although still high, the unemployment rate will drop almost a full percentage point, and home sales will register a double digit gain. However, the over 11% unemployment rate will keep retail sales gains very modest.

ADVANTAGE WEST

Unemployment:

2008: 6.4%
Forecast 2009: 11.9%
Forecast 2010: 11.7%

Retail sales:

2008: Down 9.2%
2009 forecast: Down 12%
2010 forecast: Up 4%

Existing home sales:

2008: Down 21.5%
2009 forecast: Down 30%
2010 forecast: Up 15%

Overview:

The unemployment rate in the Advantage West region will average just under 12% in 2009, but the rate will begin a slow decline in 2010. Retail sales and home sales will both rebound in 2010 from very low levels in 2009. Jobs will increase in 2010 but at a rate under the state average. The recession has re-emphasized to regional leaders the importance of diversifying the local economy to sectors expected to have above-average growth in coming decades.

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  • jpquick Jul 6, 2009

    Looks like all regions will be significantly below full employment for at least the next 3 years.

    This is clearly the perfect time for a job destroying $1.5 billion tax increase from Democrats in the General Assembly...

    I suspect the revised forecast will look quite different if Bev's budget becomes law.