RALEIGH – The New Year of 2020 will not be a booming year economically for North Carolina after recent years of more robust growth, says North Carolina State University economist Dr. Mike Walden.
In a report issued Monday, Walden predicts “modest” job growth that will be lower than the increase seen in 2019. He also sees the unemployment rate climbing as more people return to the workforce after having given up finding a job as well as continuing net increase of people moving to the Tar Heel state.
Walden does not expect a recession, based on the data he has crunch over the past year and trends entering 2020. Rather, he sees a “deceleration” in growth.
Walden’s forecast is similar to a Kiplinger report issued in October.
“North Carolina is in for a third year of more moderate growth, as the state moves past its 2012-16 growth spurt, and reverts back to the U.S. average,” Kiplinger reported.
Says Wadeln: “Real GDP [gross domestic product] growth in the state is expected to range between 1.5% and 1.7%.”
The jobless rate will increase in metros across the state to as high as 5.3% in Rocky Mount and 5% in non-metro areas.
A broad set of data he uses in compiling his monthly and annual forecasts is called the NCSU Index of North Carolina Leading Economic Indicators. These range from the unemployment rate to pay and building permits.
Walden says he has seen “little change in the last year, although the level is below that for the previous three years. The interpretation is the North Carolina economy will continue to expand in 2020, but at a slower rate.
Walden forecasts the state’s economy will produce between 60,000 and 70,000 jobs, well below the expected 90,000 expected by the end of 2019.
Kiplinger forecast even fewer new jobs: 45,000.
However, there are no guarantees that even the more modest growth and job factors will be achieved, he points out.
“Currently, the most important is a resolution of the trade conflict with China. A successful resolution could add as much as a half percentage point to real GDP growth, with an accompanying acceleration in employment growth,” he says.
“In contrast, a protracted dispute with no resolution in sight would reduce future growth.”
Walden also believes the politics of 2020 could have an impact as well as “geopolitical uncertainties” such as in Korea, Brexit and the Middle East.
“Threats to world political stability from Korea and the Middle East are likely the most important [international factors],” he says.
Then there is the turmoil in Washington, D.C.
“Last is domestic political uncertainty emanating from impeachment activities and the 2020 presidential election,” Walden writes.
“However, research shows no consensus on the impact of political uncertainty on economic uncertainty and economic growth.”