While the Wilmington area’s economy continues to contain “bright spots and reasons for optimism,” job creation remains an area of concern, according to a recent UNCW report.
Unemployment rates in New Hanover, Brunswick and Pender counties have fallen this year, in some cases dropping below the 4.8 percent that federal agencies consider full employment.
“However, focusing only on the headline number glosses over remaining weakness in labor markets of part-time workers who wish to be full time and potential workers who have given up looking for work and dropped out of the unemployment statistics,” according to the July 2016 Economic Barometer
published by the Swain Center for Business and Economic Services at the University of North Carolina Wilmington.
Along with sharing insights on regional indicators, UNCW economists Adam Jones and Thomas Simpson cover investor perceptions of risk, benchmark securities, inflation rates, the state of North Carolina's economy and more economic issues in the report.
The regional portion of the barometer goes on to explain that while local unemployment rates have fallen, “digging a little deeper shows that much of this improvement owes to a small decline in the size of the labor force and not an increase in jobs.”
As Jones put it Monday, "4.3 [the unemployment rate for New Hanover County in May] makes it sound like things are going gangsbusters, but if you ask people and survey people, they’re going to say, 'Eh, it's not quite so good.'"
According to the barometer, local labor force numbers aren’t detailed enough to give all of the reasons, and while some of that labor force decline comes with shifting demographics and retirees no longer working, “the decline may also suggest a mobile workforce relocating to other areas in search of better employment prospects.”
The report points to the business and professional services sector, or businesses that provide services to other businesses rather than to consumers, as another example.
“Employment in the sector has declined suggesting a cautious outlook by local firms,” the barometer said.
The caution comes as no surprise, according to the report, because of factors such as slowing growth abroad and a Eurpoean market in turmoil as a result of Brexit; the contentious presidential election “with potentially enormous policy implications on the horizon”; and ongoing coverage of HB2.
“While the magnitude of many of these events often turns out to be smaller than anticipated, it is the current expectations that drive near term, and some long term, decisions,” the report said.
The barometer points to the region’s strong home sale numbers and increase in tourism dollars as strong and encouraging signs for the local economy.
Jones said a take-away from the barometer "is that there's this sort of mixed picture right now where there’s some positive indicators like the real estate market doing relatively well, retail sales were fairly strong . . . continuing in a positive direction, but there are also some concerning factors out there, such as the fall in business and professional services employment which suggest maybe businesses are kind of cautious."