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Economic outlook for 2008-09: Sluggish

August 07, 2008

Media Contact: Dr. Mike Walden, William Neal Reynolds Professor and North Carolina Cooperative Extension economist, 919.515.4671 or michael_walden@ncsu.edu

The economy may or may not be in a recession - that's a matter for economists to determine - but there seems to be no argument that it's less than robust. So what does the future hold economically for North Carolina?

We can expect more less-than-encouraging economic news, at least through the last half of 2008 and into 2009. That's the prediction of Dr. Mike Walden, William Neal Reynolds Professor and North Carolina Cooperative Extension economist at North Carolina State University.

In a North Carolina Economic Outlook, Walden sees the average state unemployment rate rising by 1.5 percentage points and both inflation-adjusted retail sales and wages dropping over the next six months. At the same time, he expects building permits for houses to be down 35 percent from 2007 levels.

Walden sees a slight improvement in 2009. He writes, "There will be a very modest increase in employment - mainly in the second half - but not enough to prevent the average unemployment rate for the year from rising a further 0.6 percentage points. Real retail sales and real wages will both have modest increases. But the most notable change will be in housing permits, which, after two years of declines, will register a 10 percent gain. This will signal the end of the housing bust!"

Walden's economic outlook is available in its entirety online at http://www.ag-econ.ncsu.edu/faculty/walden/publications/nceconomicoutlooksummer08.pdf. The report includes forecasts for Western North Carolina, the Charlotte area, Piedmont Triad, Research Triangle, southeast, eastern and northeastern parts of the state.

Written by: Dave Caldwell, 919.513.3127 or dave_caldwell@ncsu.edu

Posted by Dave at August 7, 2008 01:50 PM