Housing Downturn to Crimp Local Economy
Posted January 1, 2008 5:27 p.m. EST
Updated January 1, 2008 7:26 p.m. EST
Raleigh, N.C. — The new year could bring a slightly slower pace to Wake County's economy, as the turmoil in the national housing market could produce a ripple effect locally, observers said.
"I think the first six to nine months of 2008 will be iffy. Once growth slows, it will feel like a recession," said Mike Walden, an economist at North Carolina State University. "I think the slow growth, the rise in unemployment, this is all generated by turmoil in the housing sector."
The unemployment rate in the Triangle is 3.9 percent, which is below the state and national rates.
But the economic downturn in other parts of the U.S. could prevent people from moving to the Triangle because they can't sell their homes.
That could slow the local residential construction industry, which adversely affects the economy.
"When you look at construction and all the industry that goes with it, that's 12 percent of our local economy. That's a big sector," Walden said.
Home builders are preparing for the expected slowdown, said Tim Minton, executive vice president of the Home Builders Association of Raleigh-Wake County.
"I think we have to recognize as a community that we're not going to grow at the same rate, and that may not be a bad thing in the sense that it allows us to catch up on things we're dealing with," Minton said.
Wake County's public schools, for example, didn't grow as much as expected this year, easing some overcrowding concerns. Enrollment growth predictions are also down for next year.
Walden said the slow start to 2008 should be followed by a strong finish.