The Charlotte Observer

January 23, 1996

NC slowdown forecast
Recession possible by fallŐs election

Taylor Batten, Staff Writer

Copyright © 1996, The Charlotte Observer

The state's economy will slow considerably this year and could slip into a recession just as voters head for the polls in November, a report released Monday predicted.

Most of the state, including the Charlotte area, will weaken this year, the study said. But Greater Charlotte - which the report defines as Mecklenburg, Cabarrus, Rowan, Stanly, Anson and Union counties - will still have the highest growth rate in the state.

``That's reflective of what's been going on in Charlotte for a long time: its development as a regional center for finance and trade,'' said Michael Walden, an economist at N.C. State University. ``All of these regions are in some sense hostage to the general economic climate in the country. But there are some that are vibrant enough to still be growing, and I point to Charlotte and the Triangle.''

Walden teamed up with Rocky Mount-based Centura Bank to issue the first ``North Carolina Economic Outlook,'' a quarterly analysis and forecast of the state economy and 20 regions within it. Seventeen of the 20 regions are expected to perform worse this year.

Walden touted it as the first report in the state to offer detail on such local levels.

Walden created an economic index based on retail sales, the value of construction permits, total employment and the unemployment rate.

The index rose 10.5 percent statewide for the 12 months that ended Sept. 30. But the index will drop in the coming months and fall 1 percent for the 12 months that ends Sept. 30, 1996, Walden said.

``The slowdown in growth could be the forerunner of a recession later,'' Walden said. ``If it becomes obvious that the economy is slowing and unemployment rates are up and jobs aren't available, that could have an impact on the vote. People tend to blame the incumbent.''

In the 12 months Walden studied, the Charlotte region's index rose 22.9 percent. But it will rise only 5.7 percent this year, Walden said. New construction, which carried the region's economy last year, will do so again. But growth in retail sales and employment will slow, and unemployment will rise.

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Copyright © 1996, The Charlotte Observer.

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