2016 will bring stable but moderate growth to North Carolina and the Cape Fear region. That’s the prediction from the 24th Annual Economic Forecast, sponsored by McGladrey, the Wilmington Chamber of Commerce, and Wilmington Business Development.
Home prices and household spending are on the rise, indicating consumer confidence. But the economic recovery hasn’t quite reached the business sector yet. Here’s Rick Kaglic of the Federal Reserve Bank of Richmond:
“Over the course of both 2014, 2015, both the World Bank and the IMF downgraded their global growth forecasts. The net impact has been that we’ve had a slower growing global economic pie, and that kind of limits our sales opportunities.”
And to top it off, the US dollar has appreciated more than 17% since August, making goods more expensive (and less competitive) in the global market. Adam Jones of UNCW's Swain Center says a stronger dollar hits the Cape Fear region especially hard:
“Manufacturing in our region is about 16% of gross regional product. That’s somewhere around twice the national average and somewhere around twice the size of retail. Even though manufacturing employment has declined, manufacturing employment is still more important in North Carolina than in the rest of the country. This is a big part of our economy. Even though employment has tailed off, we still make a lot of stuff.”
Both economists predict that growth in the state and region will stabilize in 2016, with average growth around 2-2.5%.