A Wells Fargo Securities economist recently told a meeting of Ballantyne-area professionals that 2015 should be a year of economic growth, locally and nationally.
“The key takeaway is we’re looking at fairly solid quarterly economic growth, 2.5 to 3.5 percent growth depending on the quarter,” said Michael Brown to a luncheon of the Ballantyne Chapter of the Charlotte Chamber of Commerce.
In less than an hour, Brown ran through several economic indicators, including the U.S. budget gap, national interest rates, inflation, personal income and employment and unemployment rates.
Brown spent the last part of his talk going over state and local economic trends. Some of what he discussed about the state economy included:
• Economic activity in North Carolina is accelerating, with the coincident index at 1.9 percent. The index measures current economic activity using factors like average hours worked in manufacturing, number of nonfarm jobs and the unemployment rate.
• Employment is growing solidly in the private sector, with the unemployment rate (5.8 percent in North Carolina) nearly in line with the national rate (5.8 percent as of November)
• Income growth has returned and wage and salary growth is beginning to pick up. North Carolina personal income rates grew 3.7 percent year-over-year in the third quarter of 2014.
Concerning the Charlotte economy, Brown noted that:
• More sectors are seeing solid job growth in Charlotte, with the unemployment rate (5.8 percent in Charlotte as of November) only slightly above the national rate (which was 5.8 percent as of November).
• Raleigh, Asheville and Charlotte lead the state in employment growth with 3.5 percent, 3.3 percent and 2.9 percent respectively for year-over-year change in November.
• Charlotte has continued to see steady population growth, with a net increase of 3,600 people in 2013.
• The apartment-building market has shown strength, with 872 units completed in the third quarter of 2013.
Brown credited the local increase in apartments to the millennial generation.
“This is a very different demographic,” he said. “A lot of them are choosing to live downtown in high-rise apartments. They’re choosing to rent as opposed to buy because the prices as so high.”
He said that given this trend among millennials to want to rent, “It makes sense why you drive down Morehead (Street) and there’s an apartment building being built on every block.”
“I don’t think we’re going to see an end of the apartment building boom anytime soon,” he said.
Brown also said the state’s manufacturing sector may face some challenges associated with slower global growth. He said that job growth will be driven by the technology and professional-services sectors.
In another section of the economy, Brown said that the recovery in home equity values has supported small-business activity, since homes usually are used as collateral among small-business owners.
“We needed that recovery to take place,” said Brown.
Toward the end of his talk, Brown said global exposure is the greatest threat, especially given the slow pace of growth in Europe, accelerating growth in China and continuing issues in Japan.
“It’s certainly something, given the interconnectedness, that we’re monitoring closely,” he said.
Brown closed by answering questions from chamber attendees. One audience member asked how big an effect American fracking had had on the national economy.
“There’s been a substantial decline in the amount of oil we import, which has given us more independence on that front,” said Brown. “It is significant enough that it’s certainly helping ease some of the pressure.”