Economic Conditions

Society of American Military EngineersJuly 26, 2012

William W. Hall, Jr.Professor of Economics

Department of Economics and Financeand

Senior EconomistH. David and Diane Swain Center for Business and Economic Services

Cameron School of BusinessThe University of North Carolina Wilmington

hall@uncw.edu

Web Slides

• http://www.csb.uncw.edu/cbes/events/index.htm

Population Change

2000 2010% Change 2000-

2010Brunswick County1 73,143 107,431 46.9

New Hanover County2 160,307 202,667 26.4

Wilmington3 75,838 106,476 40.4

Pender County 41,082 52,217 27.1

Wilmington MSA 274,532 362,315 32.0

North Carolina 8,049,313 9,535,483 18.5

United States 281,421,906 308,745,538 9.7

Source: Bureau of the Census, US Department of Commerce.

1 2nd fastest growing county in the state2 9th largest county in the state3 8th largest city in the state

Wilmington MSA, NC, & US Economic Growth

2009 2010 2011 2012(F) 2013(F)

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Wil MSANCUS

Source: US Department of Commerce; Weekly Economic & Financial Commentary, Economics Group,Wells Fargo Securities, July 20, 2012; Babson Capital/UNC Charlotte Economic Forecast, UNC Charlotte,Babson Capital Management, LLC, June 5, 2012; Ravija Badarinathi and William W. Hall, Jr., for the H.David and Diane Swain Center for Business and Economic Services, Cameron School of Business, UNCWilmington.

Forecast Risks

• “Fiscal cliff”• Restrained export growth• Inflation• Federal Reserve action

“Fiscal Cliff”

• n. A moment in early 2013 when Federal tax cuts expire and automatic spending reductions take effect (see sequestration), removing $600 billion (4% of US GDP) from the already shaky economy over the coming year.

Options for Dealing with the “Fiscal Cliff”

• Congress and the White House could– Agree to a large package of tax hikes and spending

cuts or– Rewrite the laws to postpone the cliff to another

day

Options for Dealing with the “Fiscal Cliff”

• Congress and the White House could– Agree to a large package of tax hikes and spending

cuts or– Rewrite the laws to postpone the cliff to another

day (most likely)

Unemployment Rates

2007 2008 2009 2010 2011 May-11 May-120%

2%

4%

6%

8%

10%

12%

BrunswickNew HanoverPenderNCUS

Source: Division of Employment Security, NC Department of Commerce; Bureau of Labor Statistics, US Department of Labor.

Unemployment Rates

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q120%

2%

4%

6%

8%

10%

12%

14%

BrunswickNew HanoverPenderNCUS

Source: Division of Employment Security, NC Department of Commerce;Bureau of Labor Statistics, US Department of Labor.

Wilmington MSA Employment “Spider” Chart(10 Quarters Before and After the End of the Recession)

Source: Division of Employment Security, NC Department of Commerce; H. David and Diane SwainCenter for Business and Economic Services, Cameron School of Business, UNC Wilmington.

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 0

0.2

0.4

0.6

0.8

1

1.2

1.4

July 1990/March 1991April 2001/December 2001January 2008/June 2009

Wilmington, NC, MSA 2011 Employment and Wages

Average Annual Wage

NAICSSector2

% of Total Employment

Wage($)

% of All-Sector Average

% of State Sector

Health Care & Social Assistance 15.3 41,222 109.3 96.3

Retail Trade 14.2 23,834 63.2 96.7Local Government 13.5 41,284 109.2 105.6Accommodations & Food Services 12.8 14,095 37.4 94.7Educational Services 8.6 37,744 100.1 94.9Construction 6.9 45,659 121.1 110.5Public Administration 6.0 42,940 113.9 98.4

Professional & Technical Services 5.8 61,371 162.8 91.7

Manufacturing 5.6 66,754 177.1 126.9

Administrative & Waste Services 5.0 28,230 74.9 93.3

All Sectors 37,700 89.5

Source: Division of Employment Security, NC Department of Commerce.

1 Largest ten employment sectors

Retail Sales Growth Rates

2007 2008 2009 2010 2011 Year Ending Apr. 2011

Year Ending Apr. 2012

-15%

-10%

-5%

0%

5%

10%

15%

20%

BrunswickNew HanoverPenderNC

Source: NC Department of Revenue.

Retail Sales Growth Rates(Compared to Year-Earlier Quarter)

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

-5%

0%

5%

10%

15%

20%

BrunswickNew HanoverPenderNC

Source: NC Department of Revenue.

Wilmington International AirportAir Passenger Traffic Growth Rates

2007 2008 2009 2010 2011 Year Ending Apr. 2011

Year Ending Apr. 2012

-5%

0%

5%

10%

15%

20%

25%

30%

35%

BoardingsDeboardings

Source: Wilmington International Airport.

Wilmington International AirportAir Passenger Traffic Growth Rates(Compared to Year-Earlier Quarter)

Source: Wilmington International Airport.

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

BoardingsDeboardings

Port of WilmingtonContainer Tonnage Growth Rates

2007 2008 2009 2010 2011 Year Ending June 2011

Year Ending June 2012

-5%

0%

5%

10%

15%

20%

25%

30%

35%

SourceSource: NC State Ports Authority.

Port of WilmingtonContainer Tonnage Growth Rates

(Compared to Year-Earlier Quarter)

Source: NC State Ports Authority.

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

-8%

2%

12%

22%

32%

42%

52%

2010 Travelers’ Expenditures

CountyExpenditures

($ M)Payrolls

($ M)Employment

(000)

Sales Tax Revenues

($ M)

Local Tax Revenues

($ M)Brunswick 395.381 73.63 4.60 20.44 25.71

New Hanover 400.882 91.62 5.04 21.59 15.72

Pender 72.833 12.31 0.71 2.16 5.20

Wilmington MSA 869.09 177.56 10.35 45.71 36.63

Source: NC Department of Commerce.

1 10th in the state2 9th in the state3 42nd in the state

Sales of Existing Single-Family Homes(5-Month Centered Moving Average)

0

100

200

300

400

500

600

700

800

900

1000

0

50

100

150

200

250

300

350

400Wilmington Regional Association of Realtors (WRAR)Brunswick County Association of Realtors (BCAR)

2005 2006 2007 2008 2009 2010 2011

WRAR BCAR

Source: NC Association of Realtors.

Average Annual Sales Prices of Existing Single-Family Homes

Source: NC Association of Realtors.

2007 2008 2009 2010 2011$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

WRARBCAR

Average Quarterly Sales Prices of Existing Single-Family Homes

Source: NC Association of Realtors.

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

WRARBCAR

Foreclosures

Source: NC Administrative Office of the Courts.

Brunswick County New Hanover County Pender County North Carolina

2008 900 1,107 327 53,938

% Change 2007-08 83.3 41.3 36.8 9.0

2009 1,642 1,483 473 60,251

% Change 2008-09 82.4 45.8 44.6 11.7

2010 1,693 1,881 521 66,282

% Change 2009-10 3.1 26.8 10.1 10.0

2011 1,458 1,559 419 53,240

% Change 2010-11 -13.9 -17.1 -19.6 -19.7

----------------------------------

-----------------------

------------------------------ ------------------------- ---------------------------

June 2010-May 2011 1,577 1,790 499 62,277

% Change Previous Period -15.9 66.2 -12.6 -9.8

June 2011-May 2012 1,323 1,777 389 50,996

% Change Previous Period -16.1 -0.7 -22.0 -18.1

Eastern NC Military Installations

2010 ImpactCamp

LejeuneMCAS New

River Fort Bragg Pope AFBSeymour

Johnson AFBAssigned Military Personnel 48,000 340 53,000 5,400 5,600

Military Dependents 10,500 6,400 16,270 7,000 5,200

Civilian Employees 5,000 480 12,700 1,000 1,000

Military and Civilian Payrolls $249.6 M $2.9 B $275.6 M $331.7 M

Contracts with Local Vendors $3 B $261 M $457.8 M $131.9 M $199.6 M

Source: Web Sites.

Upcoming Events

• Economic Outlook Conference– Tuesday, October 9, 2012– Burney Center, UNC Wilmington campus

Special Thanks

Quarterly Barometer

• http://www.csb.uncw.edu/cbes/newsletter/index.htm

North Carolina’s Southeast

• http://www.ncse.org/