The North Carolina economy continues to grow, with positive indicators including housing prices and the Consumer Confidence Index, UNC Charlotte professor and economist John Connaughton says.
During the Mid-Year Economic Update on June 5, Connaughton said the country is now in the second-longest economic expansion since 1854. This economic expansion has been under way for 108 months, as of early June 2018.
Connaughton said, “Over the course of 2017, the North Carolina economy experienced a volatile economic growth pattern. The U.S. pattern of GDP growth was quite a bit different. During the first quarter, U.S. GDP grew by a sluggish 1.2 percent, but during the second through fourth quarters, U.S. GDP averaged over 3.0 percent growth. Overall, during this recovery/expansion, the North Carolina GSP has grown at a slower pace than the U.S. GDP. Since 2010, the U.S. GDP growth has averaged 2.2 percent, while the North Carolina GSP growth has managed only a 1.6 percent rate of growth.”
Connaughton added, “The good news going forward is that Consumer Confidence Index still remains high despite the political stalemate in Washington. In April, the index reached 128.7 - the highest level since 2000. What remains to be seen is the longer-term impact of the corporate and personal income tax cuts enacted at the end of 2017.”
Housing prices are on the rise in Charlotte, with Connaughton reporting that prices have increased over the past year by 6.4 percent.
Projections for 2018 are up for the state over the last quarter, Connaughton said. In 2018, Gross State Product (GSP) is expected to reach a level of $564,271.0 million. Real (inflation-adjusted) GSP is expected to increase by 2.7 percent over the 2017 level.
The state is expected to gain 113,000 net jobs in 2018. Twelve of the state's fourteen nonagricultural sectors of the economy are expected to experience employment increases during 2018. The sectors with the strongest expected employment increases in 2018 are construction at 7.6 percent, information at 4.5 percent, and hospitality and leisure services at 4.2 percent.
The unemployment rate is low nationally, and only slightly higher in North Carolina. The United States started 2018 with an unemployment rate of 4.1 percent, which has declined to 3.9 percent by April. North Carolina started the year with a 4.5 percent rate of unemployment, which declined to 4.4 percent by April. By December 2018, the North Carolina unemployment rate is expected to remain around 4.2 percent.
The outlook for 2019 appears to be continued slow growth. Gross State Product (GSP) is expected to reach a level of 589,725.1 million in 2019. Real (inflation adjusted) GSP is expected to increase by 2.8 percent over the 2018 level.
“This growth in 2019 would follow 2.7 percent growth in 2018 and result in 10 years of modest, but sustained economic growth for the North Carolina economy,” Connaughton said.
Connaughton presented his quarterly forecast as part of the Mid-Year Economic Update, sponsored by Barings.
About Barings
Barings is a $305+ billion* global financial services 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. Part of MassMutual, Barings maintains a strong global presence with over 1,800 professionals and offices in 16 countries. Learn more at www.barings.com
*As of March 31, 2018
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, master’s, doctoral and executive levels. 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.charlotte.edu.
Connaughton’s report is available at belkcollege.charlotte.edu/forecast. Connaughton will release the next Barings/UNC Charlotte Economic Forecast report on Sept. 12.
Media Contacts:
Belk College of Business: Kirsten Khire, APR | 704-885-4134 | kkhire@uncc.edu
UNC Charlotte media relations contact: Buffie Stephens | 704-687-5830 | 980-355-3110 | BuffieStephens@uncc.edu