NC State Economist Predicts Construction Surge


According to a N.C. State University professor’s index of North Carolina’s leading economic indicators, the state’s economy has shown modest growth since last year and will continue to grow into 2014 at a faster pace than the national economy, reports the Triangle Business Journal.

Dr. Michael Walden, a professor in N.C. State’s Department of Agricultural and Resource Economics, is the man behind the NCSU Index of North Carolina Leading Economic Indicators. The index represents a forecast of the economy’s trajectory for the next four to six months, which Walden said was unchanged in June of 2013 from one month prior.

Walden says North   Carolina’s payroll employment and labor compensation growth – which can be considered a proxy for GDP – have both improved over the past three years with added strength coming from the state’s housing, retail and public revenue sectors.

Walden expects the state to add more than 100,000 payroll jobs both in 2013 and 2014, dropping the state’s unemployment rate to 6.8 percent (it is currently 8.8 percent). He expects the Triangle region to have unemployment rates under 6 percent by next year’s close.

Walden says four factors will lead the state’s economic recovery: A manufacturing revival, a surge in construction, a boom in educated college graduates to attract knowledge-based industries, and a growing retiree population.  The index analyzes combined data from the following five components:

+ Economic Cycle Research Institute’s (ECRI) Weekly Leading Index;

+ N.C. initial claims for unemployment benefits;

+ N.C. building permits;

+ Average weekly hours of work for all N.C. manufacturing employees; and

+ Average weekly earnings of all N.C. manufacturing employees

In July of 2012, the state’s economy experienced its fourth drop in five months due to a pullback in building permits, consumer frugality and national “sluggishness.”

Last month, the index rose just 0.1 percent thanks to strength in the national index, building permits and manufacturing working hours.

“The good news is that the North Carolina economic recovery is expected to continue,” Walden’s June 2013 report reads. “The bad news is that a rapid acceleration in growth is not yet on the horizon.”  Read More.