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April 21, 2009
Could North Carolina rebound faster?
As we look ahead to when the recession is over, questions arise as to the kind of economic rebound we'll see. Do we have reason to believe that the economic recovery here in North Carolina will be faster than in the nation? Listen
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"Yes, we do, if history is any guide. Manufacturing always takes a big hit during a recession. This is simply because manufactured products can be delayed in their purchase, like a computer or furniture or appliances. You may need them but you'll say, 'Hey, I don't have the money now, or I'm worried about my job. I'm going to postpone. I'm going to keep the one that I have a little longer.' And the fact that North Carolina still is more of a manufacturing state - in fact, the best statistic that indicates this is that 20 percent of our income in the state is derived from manufacturing versus 12 percent for the nation - means that we're hit harder during a recession. But the opposite effect occurs on the rebound. Here, manufacturing usually does better because once the economy is back on track, you have all this pent-up demand for manufactured products. People delay buying them, now they really want them. And so manufacturing usually takes off, like a rocket when we're in an economic rebound. And again because North Carolina is more of a manufacturing state, historically we've seen our rebounds stronger than in other states. We hope that this pattern continues with the end of this recession. Obviously, we'll have to wait and see."
Posted by Dave at April 21, 2009 08:09 AM