Source:  Mike Walden, NC Cooperative Extension economist, NCSU, 7/7/09

 
The pain caused by the worst economic downturn since the Great
Depression will continue for the rest of the year, according to a
forecast by a North Carolina State University economist.
 
The best that can be said for the last six months of 2009 is that
economic conditions will continue to worsen at a slower pace than during
the first half of the year, says Dr. Mike Walden, William Neal Reynolds
professor and North Carolina Cooperative Extension economist in the
College of Agriculture and Life Sciences at N.C. State.
 
Walden prepares an economic outlook for the state every six months. In
his North Carolina Economic Outlook: Summer 2009, he forecasts that the
state and national economy will finally start to turn around early in
2010. But until then, conditions will continue to worsen.
 
Walden sees North Carolina’s unemployment rate, now at just over 11
percent, peaking at 13 percent early in 2010 before gradually improving
throughout the coming year. The state’s unemployment rate, which is now
2 percentage points higher than the national rate, will decline faster
than the national rate and will equal the national rate in late 2010,
Walden predicts. Yet even then, in the last quarter of 2010, North
Carolina unemployment will be around 10 percent.
 
North Carolina has lost 240,000 jobs since the recession began in late
2007, Walden says in the report. He adds that with the exception of the
government, leisure/hospitality, and education/health sectors, the state
has seen job losses in every economic sector.
 
“The losses in construction have been particularly large – almost
two-thirds greater on a percentage basis in North Carolina than in the
nation. This reflects the significant expansion in real estate and
construction in the state during the real estate boom of the early and
mid 2000s, and then the tremendous pullback in that sector as the real
estate bust materialized in late 2007 and early 2008,” Walden writes.
 
The housing market, where the recession began, holds the key to
recovery, according to Walden. The economist writes that while home
sales remain weak, “deterioration in sales appears to have stopped at
the national level, although it is too early to make the same conclusion
for North Carolina.”
 
Walden’s Economic Outlook is available on line at
www.ag-econ.ncsu.edu/faculty/walden/publications/outlooknc/ncoutlooksummer09.pdf