WNC Index: Region’s economy continues steady decline

The mountain region’s economy continues to decline, and unemployment continues to rise, according to the latest Western North Carolina Economic Index, released today by Appalachian State University’s Center for Economic Research & Policy Analysis.

The report uses data compiled in November. Among its main findings:

• Economic activity in the region decreased 0.3 percent in November.

• Seasonally adjusted employment for WNC fell 1.42 percent in November.

• Twenty-four of the 25 WNC counties experienced a net job loss in November.

• The seasonally adjusted unemployment rate within the region’s rural counties increased 0.8 points to 8.5 percent in November.

“The employment picture is ugly,” said Todd Cherry, director of the center a co-author of the report. “The region has lost more 18,000 jobs since June and nearly half of those losses occurred in November,” Cherry said.

The text of an ASU news release summarizing the report is below. Click here to download the full report.

— Jon Elliston, managing editor

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Region’s economic activity continued its decline in November

Posted January 16, 2009 at 11:14 am · By ASU News
Filed under Business, General

BOONE—Western North Carolina’s economic activity, as measured by the Western North Carolina Economic Index, continued its decline in November, the third consecutive month of negative growth for the regional economy.

Economic activity decreased 0.3 percent in November. The regional economy has declined at an annual rate of 2.8 percent since June 2008.

The index tracks the level of economic activity in 25 western North Carolina counties.

“While the downturn in regional activity began some time ago, we began to see a significant decline near the end of 2008,” said Todd Cherry, a coauthor of the index. Cherry is the Director of the Center for Economic Research & Policy Analysis at Appalachian State University.

“The dramatic drop in activity translates to fewer jobs and lower incomes, which in turn leads to additional decreases in activity.  It’s a cycle we see in every recession, but this time around the rate of deterioration is dramatic,” Cherry said.

Seasonally adjusted employment for WNC fell 1.42 percent in November.  North Carolina employment fell at a similar rate of 1.4 percent.

“The employment picture is ugly.  The region has lost more 18,000 jobs since June and nearly half of those losses occurred in November,” Cherry said.

Twenty-four of the 25 WNC counties experienced a net job loss in November. Alleghany County was the lone county that experienced a net gain in jobs.  Graham, Madison and Buncombe counties had the largest job losses (2.91, 2.40 and 2.29 percent.). County employment fell at rates exceeding 1.5 percent in 13 of the 25 WNC counties.

Seasonally adjusted regional unemployment increased dramatically in November, increasing 0.9 percentage points to 8.2 percent.

“Historically speaking, the recent jumps in unemployment rates are striking and indicates the level of distress in our economy,” Cherry said.

The state unemployment rate increased 0.8 points, registering 7.9 percent for the month. The national unemployment rate was 6.8 percent in November, up 0.3 points from the previous month.

The seasonally adjusted unemployment rate within the region’s rural counties increased 0.8 points to 8.5 percent in November. Unemployment was also higher in the region’s metro areas.  Asheville’s unemployment rate was 6.2 percent, up 0.3 points from October. The unemployment rate for Hickory-Morganton-Lenoir was 10.2 percent in November, up 1.5 points.

McDowell, Alexander and Cherokee counties had the largest increases in unemployment in November (1.91, 1.70 and 1.58 percentage points.). For the month, eight of the 25 counties had increases in unemployment rates that exceeded 1.0 point.

Avery, Watauga and Henderson counties had the smallest increases in unemployment (0.13, 0.13 and 0.21 points.).

Cherokee and McDowell counties have felt the largest increases in unemployment rates over the past 12 months (6.56 and 5.94).  During this period, 14 of the 25 counties had increases in unemployment rates that exceeded 3.0 points.

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, fell 19.1 percent in November. Initial claims decreased 5.4 percent in Asheville and decreased 8.5 percent in Hickory-Morganton-Lenoir.

The WNC Index and Report provides a monthly account of economic conditions for western North Carolina and is typically released the fifth week following each month.

For more information, visit the report’s Web site at http://www.business.appstate.edu/economics/cerpa/wncindex.php

The WNC Index and Report is compiled and written by Cherry and John W. Dawson of the Department of Economics and Richard Crepeau of the Department of Geography and Planning.

The WNC Index and Report is a cooperative effort by AdvantageWest-North Carolina and the Center for Economic Research and Policy Analysis at Appalachian State University.