The regional economy for 2019 is forecasted to have another good year, though some uncertainty is on the horizon.
That has regional economist Adam Jones, with the University of North Carolina Wilmington’s Cameron School of Business, cautiously optimistic about the road of the regional economy ahead.
Jones gave his regional forecast Thursday during the 27th annual Economic Forecast at the Wilmington Convention Center, presented by RSM, the Wilmington Chamber of Commerce and Wilmington Business Development.
The regional economy is expected to pace the national economy, he said.
As consumer sentiment remains optimistic, Jones said the area is a good shape for the summer, adding, “We think 2019 is going to be another good year in this region, for tourists, hopefully not for rain.”
Hurricane Florence, which hit in September, was disruptive to both people and business locally, he said.
The hurricane’s impact had a 2 percent hit on the area’s Gross Domestic Product, the bulk of which has already passed but some of it is still ongoing, Jones said.
But as the region recovers, Jones predicted a bump from the storm on the regional GDP, he said.
"We're going get a little bit of a bump coming out of it as we rebuild and spend on that rebuilding. So we think that that's probably going to be out in the order of 1 percent of regional GDP," Jones said.
That bump will continue through 2019 and in the early part of 2020. The forecast number for this year is 2.8 percent growth in the regional GDP, Jones said.
Wage growth increased through August 2018 and then in September fell due to the hurricane, when employers were thinking about recovery, he said. Jones said that he expects to see the wage growth here delayed a couple months as the region settles back into a more to a normal pattern.
The tri-county area's unemployment rate, however, is down .5 percent and home prices year-over-year are up about 4 percent, despite the storm, he said.
"Last year was a great year, with the exception of a couple of months," Jones said.
There is some uncertainty on the horizon, he said. Through manufacturing is a smaller percentage of employment for the region, it is a larger percentage of the area’s gross domestic product.
“That means we have exposure to international markets through our manufacturers. What happens in the rest of the world comes back to us through that channel,” Jones said. “I have no idea how to forecast what’s going to happen on the trade policy front.”
Other areas of uncertainty economists are watching out for is a changing trend in the region, which is the percentage of the population in the region that is working. That seems to be declining, as more retirees move into the area.
That means fluctuations in the financial markets will affect their spending, Jones added.
“The more our community is made up of retirees, the more those fluctuations are going to matter to us,” Jones said.
As long as consumer sentiment stays high, however, the region is in a good spot. If consumer spending should drop, discretionary spending will also drop, including money spent on trips to the beach, he said.
That influences the industries that are a big part of the regional economy.
“What are we watching over the next two years? We’re going to be keeping a real close eye on consumer sentiment and how willing our folks are to part with their hard-earned dollars. Right now for the next year, we are cautiously optimistic,” Jones said.
Correction: This story has been updated to show the GDP forecast number is 2.8 percent growth for 2019.