At UNCW’s annual OUTLOOK conference, economists forecasted the regional economy would grow slightly faster than the national average over the next year. WHQR’s Isabelle Shepherd says UNCW’s Dr. Adam Jones compared the local economy to a car being driven with both feet – one on the gas, and one on the brake.
There are reasons for optimism when reviewing last year’s numbers. The Cape Fear region’s labor market has improved, and workers are reentering the workforce. Both retail and home sales are on the rise, and business owner sentiment is improving. But Adam Jones says some state policies are putting the brakes on this growth:
"Changes in film tax incentives may reduce growth by up to three quarters of a percent. However, with the recent increase in the grant funds, the effect remains uncertain and is an area of active research. Debate surrounding renewal of the Export-Import Bank are a source of uncertainty for local manufacturers. And finally, liftoff of interest rates will increase the cost of capital."
In addition, the value of the dollar has risen nearly 20% over the past year, making American manufactured goods less competitive in foreign markets. This is exacerbated by the fact that global economic growth appears to be slowing. Jones notes that this directly affects the Cape Fear region, as manufacturing makes up 16% of the gross regional product. That’s twice the national average and twice retail’s contribution to the local economy.
Adam Jones forecasts growth at the regional level of 3% for 2015 and 2.5% for next year. UNC-Charlotte forecasters see the state growing at roughly the same rate. The national forecast is 2.2% and 2.5%, respectively.