The economy is continuing to grow, albeit slowly. Post-election and throughout 2017, the economic forecast pattern will continue, said UNC Charlotte economist John Connaughton today during the Barings/UNC Charlotte Economic Forecast.
“During the first half of 2016, the North Carolina economy seemed to experience slower growth than during the previous 18 months. What has been happening in North Carolina during the first half of 2016 is not dissimilar to what has happened in the U.S. It seems that after seven years of economic expansion, the economy has begun to slow. The U.S. economy has been expanding for 89 months, which represents the fourth longest economic expansion on record out of the 33 expansions that have been tracked by the NBER since 1854,” Connaughton said.
Connaughton said despite an expected increase in interest rates by the Federal Reserve, key indicators for the economy are strong, including the stock market and consumer spending.
“The November Consumer Confidence Index was at 107.1, the highest level since the Great Recession began. This, along with the general bump associated with the election, should increase consumer spending over the next several months, providing an offset to increased interest rates,” he said.
Connaughton expects that the economy will not experience a significant change in the growth pattern through 2017. In 2017, the North Carolina economy is expected to increase by an inflation-adjusted rate of 2.0 percent over the 2016 level.
Connaughton said, “Positive economic growth in 2017 would represent the eighth consecutive year of economic growth for the North Carolina economy. While this is an impressive trend of growth, the size of that economic growth has been somewhat lacking. In fact, for most of the 21st century, both the U.S. and North Carolina economies have been unable to achieve an average 3.0 percent real GDP growth rate that had been fairly consistent since World War II. The 2.5 percent real growth rate experienced over the 2014-2015 period was stronger than the recent past, but the slower growth expected in 2016 could signal a return to the slow growth pattern.”
Notably, Connaughton said that GDP growth will only be possible though productivity growth measures, as labor force growth has been stagnate for many years through the retirement of the Baby Boomer generation.
Connaughton presented his quarterly forecast to members of the Charlotte business community and the media at a luncheon held at UNC Charlotte Center City. The Forecast is funded by Barings.
Barings is a $284+billion* global asset management firm dedicated to meeting the evolving investment and capital needs of our clients. We build lasting partnerships that leverage our distinctive expertise across traditional and alternative asset classes to deliver innovative solutions and exceptional service. A member of the MassMutual Financial Group, Barings maintains a strong global presence with over 1,700 associates and offices in 17 countries. Learn more at www.barings.com.
*As of September 30, 2016.
About the Belk College of Business
Accredited by AACSB International, the Belk College of Business at UNC Charlotte offers outstanding business education programs at the undergraduate, graduate, doctoral and executive levels, including the top 20 nationally-ranked MBA and Mathematical Finance programs based at UNC Charlotte Center City. The Belk College is committed to building strong partnerships in the Greater Charlotte region and beyond as a vital part of our mission as North Carolina's urban research business school. Find the Belk College of Business online at belkcollege.uncc.edu.
The full Forecast report is available at belkcollege.uncc.edu/forecast.
Connaughton will release his next Forecast report on March 2, 2017.
Belk College of Business: Kirsten Khire, APR | 704-885-4134 | firstname.lastname@example.org
UNC Charlotte Public Relations: Buffie Stephens | 704-687-5830 | 980-355-3110 | BuffieStephens@uncc.edu