Annual Growth Rates In Real GSP
6 5 4 3 2 1 2005 2006 4.9 2.4 2007 1.7 2008f 2.5 2009f 6.8
Forecast Highlights
• For 2008, NORTH CAROLINA real GSP is expected to increase by 1.7 percent over the 2007 level. • Eight of the state’s eleven economic sectors are forecast to experience growth during 2008. The sectors with the strongest expected growth forecasts are services with a projected real g growth rate of 5.0 percent, government with a projected real p g p j growth rate of 4.3 percent, and wholesale trade with a projected real growth rate of 4.7 percent. • For 2008 NORTH CAROLINA establishments are expected to add 23,900 net jobs, and increase of 0.6 percent over the 007 eve . 2007 level.
GSP/Gross State Product is a yardstick that measures the total output of a state’s economy during a given year period. It is analogous to the U.S. Gross Domestic Product (GDP).
• Five of the state's ten nonagricultural sectors of the economy are expected to experience positive employment growth during 2008. 6.6 • The NORTH CAROLINA unemployment rate was at 6 6 percent in July of 2008. • For 2009, NORTH CAROLINA real GSP is forecast to increase by 2.5 percent over the 2008 level. • Seven of the state’s eleven economic sectors are forecast to state s experience growth during 2009. The sectors with the strongest expected growth forecasts are services with a projected real growth rate of 5.7 percent, wholesale trade with a projected real growth rate of 4.2 percent, and government with a projected real growth rate of 3.5 percent. • For 2009 NORTH CAROLINA establishments are forecast to add 51,200 net jobs, an increase of 1.2 percent over the 2008 level.
Year-End Seasonally Adjusted North Carolina Unemployment Rates
7 6 5 4 3 2 1 6.6 5.0 4.7 4.7 6.7
2005
2006
2007
2008f
2009f
QUARTERLY GROWTH RATES IN REAL GSP
6 5 4 3 2 1 0.6 2008 I 2008 IIf 2008 IIIf 2008 IVf 2.7 27 2.6 26 2.5 25
2008 GSP
Gross State Product (GSP) is expected to reach a level of 417,725.8 million in 2008. Real (inflation adjusted) GSP is expected to increase by 1.7 percent over the 2007 level. The GSP growth expected in 2008 will be weaker than the growth rate of 2.4 percent experienced during 2007. y p g Overall, the North Carolina economy is expected to grow during all four quarters of 2008. In the first quarter, GSP increased by an annualized real growth rate of 0.6 percent. During the second quarter, GSP growth is expected to pick-up and record an annualized real growth rate of 2.7 percent. In the third quarter GSP growth should continue, with an expected a ua ed c ease o .6 pe ce t. annualized increase of 2.6 percent. For the fourth quarter, o t e ou t qua te , North Carolina GSP is expected to increase by an annualized real growth rate of 2.5 percent.
2008 Highlights
2008 * Current Dollars Total Gross Product Constant (2000 Dollars) Total Gross Product Farm Agricultural Services Mining Construction Manufacturing Durable Goods Nondurable Goods TWUI Wholesale Trade Retail Trade FIRE Services Government 417,725.8 Percent Change 4.1
346,094.6 2,400.3 885.3 416.1 12,830.8 ,830.8 70,176.1 32,250.8 37,925.3 28,088.9 19,491.5 23,547.1 72,846.3 72 846 3 74,547.5 40,864.8
1.7 -13.2 -2.2 1.6 -1.9 1.9 -1.0 -2.4 0.3 2.2 4.7 0.1 0.5 05 5.0 4.3
The first quarter performance was consistent with the U.S. GDP growth of 0.9 percent. The second quarter forecast for North Carolina GSP is slightly weaker than the U S GDP U.S. growth of 3.3 percent. Many economists believe that the increase in GDP growth during the second quarter is a result of the stimulus checks, and expect GDP to drop back to its first quarter performance. However, many households did not receive their checks until late in the second quarter so it is likely that the stimulus effect will continue into the third quarter. In addition, the recent decline in oil prices should provide a boost to the economy beginning in the second half of the third quarter and continuing into the fourth quarter of 2008. With the bounce created by the stimulus package, reinforced by the decline in il i b th d li i oil prices, and i d improvement i consumer t in confidence, it is likely that the rebound that began in the second quarter will continue through 2008.
* millions of dollars
2008 Total Real GSP Growth 1.7%
1.0 0.1 3.7 9.3
2008 GSP Sector Analysis
The chart to the left presents the expected contributions of each major economic sector to North Carolina’s Gross State Product (GSP). The real (inflation adjusted) growth rate expected for 2008 is 1.7 percent. The real growth rates for each sector (displayed in black type) are plotted on the horizontal axis. The percentages of GSP contributed by each sector (displayed in green type) are plotted on the vertical axis. The resulting rectangles show the weighted importance of each sectors' expected growth during 2008. All of the sector information presented in the table to the left is based on the new North American Industry Classification System (NAICS) definitions. g Eight of the state’s eleven economic sectors are forecast to experience growth during 2008. The sectors with the strongest expected growth forecasts are services with a projected real growth rate of 5.0 percent; government with a projected real growth rate of 4.3 percent; wholesale trade with a projected real growth rate of 4.7 percent; and transportation, warehousing, utilities, and information (TWUI) with a projected real growth rate of 2.2 percent. Four other sectors are expected to experience growth, but at a rate less than the overall growth rate of 1.7 percent. These sectors are mining with a projected real growth rate of 1.6 percent; finance insurance and real estate (FIRE) with a finance, insurance, projected real growth rate of 0.5 percent; nondurable goods manufacturing with a projected real growth rate of 0.3 percent; and retail trade with a projected real growth rate of 0.1 percent. Three sectors: durable goods manufacturing, construction, and agriculture are expected t experience a d li i lt t d to i decline i output in t t during 2008.
Agriculture -10.6 Mining 1.6 Construction -1.9 Durables -2.4 Nondurables 0 3 0.3
11.0 11 0
Perc cent of Total Real GSP R
8.1 5.6 6.8
TWUI 2.2 Wholesale Trade 4.7 Retail Trade 0.1
21.0
FIRE 0.5
21.5
Services 5.0
11.8
Government 4.4
Percent of Real Sector Growth
QUARTERLY GROWTH RATES IN FORECASTED REAL GSP
6 5 4 3 2 1 2.3 23 2009 I 2.8 2009 II 2.7 .7 2.6 26
2009 GSP
Gross State Product (GSP) is expected to reach a level of 441,199.2 million in 2009. Real (inflation adjusted) GSP is expected to increase by 2.5 percent over the 2008 level. The growth rate for 2009 is expected to be stronger than the growth rate of 1.74 percent experienced during 2008. For 2009, first quarter GSP is expected to increase by an annualized real growth rate of 2.3 percent. During the second quarter, GSP growth is expected to pick-up and increase by an annualized real rate of 2.8 percent. In the third quarter, GSP growth is expected to continue and record an annualized real growth rate of 2.7 percent. In the fourth quarter of 2008, GSP growth i expected t reach an annualized real rate of 2 6 th is t d to h li d l t f 2.6 percent. With the turn around in the economy expected during the second half of 2008, we should expect to see a continued p g y p g upswing in economic activity in 2009. This expansion began in the fourth quarter of 2001, and while growth slowed during late 2007 and the first half of 2008, the expected growth in 2009 would make this expansion 33 quarters in length. By comparison, the expansion during the 1990’s was 41 quarters long, and had two periods when the economy experienced slow growth. growth This occurred for 3 quarters in 1993 and for 2 quarters in 1995. In fact, a slow down for an extended period during an expansion is not unusual. Despite the fact that for the past several months many economists have been suggesting that the economy will fall into recession, this has not happened, and many of the factors that caused the slowdown are now either stable or on the rebound.
2009 III 2009 IV
2009 Hi hli ht Highlights 2009 * Current Dollars Total Gross Product Co sta t ( 000 o a s) Constant (2000 Dollars) Total Gross Product Farm Agricultural Services Mining Construction g Manufacturing Durable Goods Nondurable Goods TWUI Wholesale Trade Retail Trade FIRE Services Government 441,199.2 Percent Change 5.6
354,909.9 2,422.2 884.8 415.2 12,773.2 , 69,741.8 31,845.9 37,895.9 29,068.3 20,301.3 23,866.7 74,312.8 78,809.7 42,314.0
2.5 0.9 -0.1 -0.2 -0.4 -0.6 -1.3 -0.1 3.5 4.2 1.4 2.0 5.7 3.5
* millions of dollars
2009 Total Real GSP Growth 2.5%
0.9 0.1 3.6 9.0
2009 GSP Sector Analysis
The chart to the left presents the projected contributions of each major economic sector to North Carolina’s Gross State Product (GSP). The real (inflation adjusted) growth rate for 2009 is forecast to be 2.5 percent. Projected real growth rates for each sector (displayed in black type) are plotted on the horizontal axis. Projected percentages of GSP contributed by ( p y g yp ) p each sector (displayed in green type) are plotted on the vertical axis. The resulting rectangles show the expected weighted importance of each sectors' growth during 2009. All of the sector information presented in the table to the left is based on the new North American Industry Classification System (NAICS) definitions. Seven of the state’s eleven economic sectors are forecast to experience growth during 2009. The sectors with the strongest expected growth forecasts are services with a projected real growth rate of 5.7 percent; wholesale trade with a projected real growth rate of 4.2 percent; government with a projected real growth rate of 3 5 percent; and transportation 3.5 transportation, warehousing, utilities, and information (TWUI) also with a projected real growth rate of 3.5 percent. Three other sectors are expected to experience growth but at a rate less than the overall growth rate of 2.5 percent. These sectors are finance insurance and real estate (FIRE) with a finance, insurance, projected real growth rate of 2.0 percent; retail trade with a projected real growth rate of 1.4 percent; and agriculture with a projected real growth rate of 0.7 percent. Four sectors: durable goods manufacturing, nondurable goods manufacturing, construction, and mining are expected t f t i t ti d i i t d to experience declines in output during 2009.
Agriculture 0.7 g Mining -0.2 Construction -0.4 Durables -1.3 Nondurables -0 1 0.1
10.7
Perc cent of Total Real GSP R
8.2 5.7 6.7
TWUI 3.5 Wholesale Trade 4.2 Retail Trade 1.4
20.9
FIRE 2.0
22.2
Services 5.7
11.9
Government 3.5
Percent of Real Sector Growth
2008 Year-End Employment Trends
0.2 6.1 6.6 5.6
2008 Employment Sector Analysis
The sector employment analysis presented on this page is based on the new North American Industrial Classification System (NAICS). Seasonally adjusted nonagricultural employment in North Carolina is expected to reach 4,198,400 persons by December 2008, an increase of 0.6 percent over the employment level in December 2007. The employment growth is expected to add 23 900 net jobs to the state's economy during the year 23,900 state s year. Only five of the state's ten nonagricultural sectors of the economy are expected to experience positive employment growth during 2008. The sectors expected to display the strongest employment growth rates in 2008 are services at 2.1 percent, retail trade at 1.7 percent, and FIRE at 1.5 percent.
Mining -0.5 Construction -0.9 Durables -3.1 Nondurables -5.0 TWUI -1.1 Wholesale Trade 1.2 Retail Trade 1.7 FIRE 1.5
Perce of Total Em ent mployment
4.8 4.4 11.2 5.1
2008 Employment Highlights Year-End* 39.3 Total Establishment Employment Mining Construction Manufacturing Durable Goods Nondurable Goods TWUI Wholesale Trade Retail Trade FIRE Services Government G t
*thousands
Percent Change 0.6 -0.5 -0.9 -4.0 -3.1 -5.0 50 -1.1 1.2 1.7 1.5 2.1 0.3 03
Services 2.1
16.8
Government 0.3
Percent Change Total Employment Increase 0.6 %
4,198.4 6.9 254.5 512.9 278.4 234.6 234 6 200.6 185.7 471.4 213.7 1,648.9 703.9 703 9 of persons
2009 Year-End Employment Trends
0.2 6.1 61 6.4 5.2 4.7
2009 Employment Sector Analysis
The sector employment analysis presented on this page is based on the new North American Industrial Classification System (NAICS). Seasonally adjusted nonagricultural employment in North Carolina is expected to reach 4,249,600 persons by December 2009, an increase of 1.2 percent over the employment level in December 2008. The employment growth during 2009 is expected to add 51,200 net jobs to the state's economy. Seven of the state's ten nonagricultural sectors of the economy are expected to experience positive employment growth during 2009. The sectors that are expected to display the strongest employment growth rates are service at 3.1 percent, FIRE at 2.3 percent, and wholesale trade at 1.9 percent. p
Mining -5.7 Construction 1.1 C t ti 1 1 Durables -2.2 Nondurables -5.8 TWUI 0.3 Wholesale Trade 1.9 Retail Trade 1.5 FIRE 2.3
Percen of Total Em nt mployment
4.5 11.3 5.1
2009 Employment Highlights Year-End* 40.0 40 0 Total Establishment Employment Mining Construction Manufacturing Durable Goods Nondurable G d N d bl Goods TWUI Wholesale Trade Retail Trade FIRE Services Government Percent Change 1.2 -5.7 1.1 -3.9 -2.2 -5.8 0.3 1.9 1.5 2.3 3.1 0.2
Services 3 1 S i 3.1
16.6
Government 0.2
Percent Change Total Employment Increase 1.2%
4,249.6 6.5 257.3 493.2 272.2 220.9 201.2 189.1 478.4 218.6 1,700.4 704.9 *thousands of persons
2008 NORTH CAROLINA UNEMPLOYMENT RATES
7 6.5 6 5.5 5 4.5 4 3.5 3 2.5 2
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
NC Seasonally Adjusted NC Seasonally Adjusted Forecast US Seasonally Adjusted
FORECAST reports historical seasonally adjusted monthly unemployment rates for North Carolina and the United States and forecasts the seasonally adjusted monthly unemployment rate for North Carolina. The seasonal adjustment accounts for variations in labor market conditions that cause regular fluctuations in the unemployment level each month. The graph at the top of this page provides a summary of the monthly unemployment rates for 2008. The solid green line represents the North Carolina seasonally adjusted historic unemployment rate. The seasonally adjusted unemployment rate for the United States is represented by the solid blue line. The North Carolina seasonally adjusted unemployment rate forecast is presented by the solid yellow line. The seasonally adjusted rates for the United States and North Carolina can be directly compared and provide more reliable estimates than the unadjusted rates. The North Carolina seasonally adjusted unemployment rate began the year at 4.9 percent, the same as the United States rate. By July, the North Carolina rate had risen to 6.6, while the United States rate was at 5.7 percent. The North Carolina unemployment rate is expected to remain stable during the year, and by December increase slightly to 6.7 percent.