Economist presents 2014 forecast for Wake County

mhankerson@newsobserver.comJanuary 10, 2014 

  • Economic Forecast

    Mike Walden’s annual presentation is known for one thing: predicting how the economy will fare in the coming year. Below are some of his predictions at the national, state and local levels, all of which should be be taken with “not a grain of salt, the whole salt shaker,” he said.

    National

    225,000-250,000 jobs created monthly

    2.5-2.75 percent GDP growth rate

    Unemployment to be between 6 and 6.5 percent by the end of the year

    State

    100,000 net jobs by the end of the year

    6.5 to 7 percent unemployment by the end of the year

    70 percent of jobs will be created around Charlotte, in the Triangle or in the Triad (Greensboro) area

    Local

    (Note: Walden’s predictions focused on the Raleigh-Cary area)

    15,000 to 20,000 new jobs

    5.2 percent jobless rate

— North Carolina is recovering nicely from the 2008 recession with help from a steadily increasing housing market, N.C. State economist Mike Walden told an audience at the Knightdale Chamber of Commerce’sEconomic Forecast breakfast Tuesday morning.

Walden said a key indication of economic recovery was a growing housing market, something North Carolina and Knightdale have both experienced in the past two years, he said.

“We absolutely had to ... recover the housing market (to recover from the recession),” he said.

Walden told town staff and local business owners the housing boom and subsequent downturn was the “signature of the recession.”

From 1997 to 2006, Walden said home sales and construction both increased. The average price of the home doubled and it created an investment bubble – which almost never ends well, he said.

The bubble did burst but Knightdale is recovering well. Walden cited the increased number of building permits within the town as proof the town is bouncing back along with the state.

In June, Knightdale had the third-most building permits in the county, behind only Raleigh and Cary.

State of recovery

In addition to a strong housing market, Walden said even through the recession, North Carolina was an attractive option for people looking to move from other parts of the country.

Between 2000 and 2010, it was one of the most popular states for people to move to behind Texas, Arizona and Florida, Walden said. The most popular new residents were 55 years old and above.

In addition to drawing people in to help support the rebounding housing market, Walden said North Carolina has been holding its own through economic recovery.

Walden said the state’s job growth is slightly higher than the country’s, especially in the manufacturing field.

“(Manufacturing has) come roaring back,” he said. Walden said most companies have more efficient means of manufacturing that don’t require workers, so there will never be the same number of manufacturing jobs as there were pre-recession, but it has helped North Carolinians with jobs.

And even though the state’s unemployment rate is higher than the national average, it is improving by adding jobs in the information and professional business fields.

The state, despite seeing an increase in housing construction, hasn’t seen an increase in construction jobs. Walden said he unofficially surveyed some residents and found that, more so than ever before, people were relying on themselves to construct houses rather than spend money on construction companies.

Eventually, Walden said, that pattern would have to change.

Still problems to solve

Even though most of the state is doing well, Walden said the state does face some challenges.

While there is positive overall growth, most of the job growth is happening around Charlotte followed by the Triangle. Rural areas of the state are barely scraping by.

“We do have a a very diverse state,” Walden said. “Some of our ... rural and eastern areas struggle.”

Since the ‘bottom of the recession,’ which was around 2010, most areas in the state have had significant job gains. In the east, however, the gains are small.

Goldsboro had a 1.4 percent job gain. Rocky Mount had a 3.3 percent decrease in jobs.

Walden also said the state would have to address problems with roads, education attainment and bridging the gap between more urban areas and rural areas.

Hankerson: 919-829-4826; Twitter: @easternwakenews

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