RALEIGH – The economic indicators that will drive the state’s economy in the next four to six months rose “a strong 1.7% in February” from the prior month, according to the latest economic index from North Carolina State University.

The monthly report, known as the NCSU Index of North Carolina Leading Economic Indicators, tracked gains in manufacturing hours, manufacturing earnings, and building permits.

While those indicators rose, there was a decline in the national index as well as an increase in new unemployment claims, though these measures of the economy were outpaced by the gains in the other areas.

According to the report, released Monday, the index is now 7% higher than it was a year ago.

North Carolina’s economy ‘little changed’ as warning signs of recession emerge

NC’s future economy depends on 3 factors

Even with the strong gains, there will be three factors that drive the future course of North Carolina’s economy, the report notes.

“The future course of the economy will be determined by three forces,” said Dr. Michael Walden, a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University, an economist who produces the monthly index.

The first of those factors are the status of the ongoing COVID-19 pandemic.  Should the severity and prevalence of the pandemic subside, it will be a positive for the economy, the report notes.

There’s also the ongoing war in the Ukraine.  Should the war escalate and involve, directly, United States forces, the report notes that “fear of what may happen could put the economy in reverse.”  But a settlement or conclusion, or potentially even a stalemate, may be viewed positively, the report notes.

The third factor is how fast the Federal Reserve may tighten monetary policy as it decides how to proceed to curtail inflation, said Walden, who is also a regular WRAL TechWire contributor.

“The worry is if the Fed’s actions push the economy from growing more slowly to not growing at all,” the report reads.  “Meaning a recession.”