In this Insights, William W. "Woody" Hall, Jr., Ph.D., takes a look at the local economy. Hall is a professor of economics at UNCW's Cameron School of Business and a senior economist in the H. David and Diane Swain Center for Business and Economic Services.
Gross Domestic Product
Real multi-county gross domestic product (GDP), a measure of inflation-adjusted total output in the Wilmington, North Carolina Metropolitan Statistical Area (MSA) composed of New Hanover and Pender Counties, was virtually unchanged between 2011 and 2012. Real GDP rose 2.9 percent over 2013 and is forecast to grow 3.5 percent over 2014 and 3.8 percent over 2015.
Compared to the experience of the Myrtle Beach-Conway-Georgetown, South Carolina MSA, the Wilmington MSA took a smaller hit in 2008 and 2009. However, the Myrtle Beach-Conway-Georgetown MSA has shown steadier growth since 2010.
Employment and Unemployment
Compared to the expansions following the 1990-91 and 2001 national recessions, employment growth in the Wilmington MSA following the end of 2008-09 national recession has been relatively weak. More than five years following the end of the last national recession (mid-year 2009), employment in the Wilmington MSA is 8.1 percent above its recession low. At the same point following the relatively mild 2001 national recession, employment was 29.9 percent higher, and the comparable change following the 1990-91 national recession was 10.2 percent.
Unemployment rates in area counties, the state and the nation have decreased to six-year lows. The November 2014 seasonally adjusted unemployment rate in Brunswick County of 6.2 percent was the lowest since June 2008. The New Hanover County rate of 5.3 percent was the lowest since July 2008. The Pender County rate of 5.7 percent was the lowest since June 2008. The November 2014 seasonally adjusted rates in the state and nation were 5.3 percent and 5.8 percent, respectively, and the lowest since mid-2008. County unemployment rates have been falling since the early part of 2013.
Given the decline in the labor force participation rate – the percentage of the population at least 16 years old that is either employed or unemployed – the unemployment rate associated with full employment is now around 5.5 percent. As a result the economy is close to full employment. However, wages have yet to show growth that matches that which occurred in the recoveries following the 1990-91 and 2001 recessions.
Throughout southeastern North Carolina and statewide, retail sales have been growing since 2010, and as a result have more than recovered from their 2008-09 losses associated with the last recession. For the year ending September 2014 (October 2013-September 2014), sales were up 7.3 percent in Brunswick County to $1.3 billion, 6.7 percent in New Hanover County to $3.5 billion, and 10.1 percent in Pender County to $329.5 million. The increase in sales statewide for the same period was 6.5 percent to $113.6 billion.
New Hanover County levies two 3-percent room occupancy taxes. The revenues from each tax are earmarked for different purposes.
Collections from the two taxes combined rose 2.5 percent over 2013 to $9 million ($150.4 million in rental revenues). For the year ending October 2014 (November 2013-October 2014), tax collections were up 10.2 percent to $9.9 million ($165.4 million in rental revenues). Growth was especially strong during the second quarter of 2014 with collections up 13.2 percent from their second quarter 2013 total. As was the case with retail sales, tax revenues have more than rebounded to their pre-recession levels.
Wilmington Air Passenger Traffic and Port of Wilmington Container Tonnage
Air passenger traffic at the Wilmington International Airport was virtually unchanged between and 2012 and 2013 at 802,300. For the year ending November 2014 (December 2013-November 2014), air passenger traffic was down 3.2 percent to 774,030.
Container tonnage through the state port facilities in Wilmington rose 4.4 percent over 2013 to 2.13 million short tons. For the year ending November 2014 (December 2013-November 2014), container tonnage was up 5.9 percent to 2.3 million short tons.
Residential Real Estate Market
Following a substantial decline over 2005-08, the local residential real estate sector has stabilized, with both existing single-home prices and sales volume apparently having bottomed out.
Since reaching their low in late 2007, sales in the area served by the Brunswick County Association of Realtors (middle and southern Brunswick County, Bladen County, and Columbus County) are up 171 percent as of the third quarter of 2014. Prices in the Brunswick area likely bottomed out in the first quarter of 2012. As of the third quarter of 2014, the average price was up 15 percent from its low to $220,300.
Since reaching their low in early 2009, sales in the area served by the Wilmington Regional Association of Realtors (Pender County, New Hanover County, and northern Brunswick County) are up 141 percent as of the third quarter of 2014. Prices in the Wilmington area likely bottomed out in the first quarter of 2012. As of the third quarter of 2014, the average price was up 18 percent from its low to $247,400.
Since reaching their low in late 2008, existing single-home sales in the state are up 51 percent as of the third quarter of 2014. Prices in the state likely bottomed out in the fourth quarter of 2012. As of the third quarter of 2014, the average price was up 23 percent from its low to $211,300.
Economic conditions in the Wilmington area are slowly improving following the most severe national, state and local contraction in decades, with the pace of growth accelerating in recent quarters. The recovery has been especially strong in retail sales and tourism. After experiencing enormous hits over the past several years, the residential real estate market has resumed growth. The major continuing dampening factor is relatively slow job and wage growth.
For quarterly updates on national and local area economic conditions, visit http://www.uncw.edu/profdev/outreach.html and click Economic Barometer Newsletter.
For 2014-2015, Dr. Robert T. Burrus, Jr. will serve as interim Dean of the Cameron School of Business at the University of North Carolina Wilmington. Before taking on the role of interim Dean, Burrus was the department chair for economics and finance and a professor of economics. He has been on Cameron’s faculty since 1998. The Cameron School of Business has 90 full-time faculty members and 29 administrative and staff members. The school hosts approximately 2,000 undergraduate students and 170 graduate students. International students come to study at Cameron from all over the world. The Cameron School of Business is AACSB accredited; offers capstone experiences; houses a Financial Trading Markets Room; provides for overseas learning opportunities; and is a founding member of the Trans-Atlantic Business School Alliance. To learn more about the Cameron School of Business, please visit http://csb.uncw.edu/. Questions and comments can be sent to [email protected].
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