North Carolina 2016 economic forecast projects 111,000 new jobs, ‘stable’ growth

Posted Dec. 8, 2015 at 2:07 p.m.

North Carolina 2016 economic forecast projects 111,000 new jobs, ‘stable’ growth

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In one of the most closely economic forecasts focusing on North Carolina, UNC Charlotte Economist John Connaughton foresees “modest growth” and a “stable new year” for 2016.

The economist also sees some good news on the employment front with the state adding a net of 111,200 jobs.

Connaughton, who teaches at the Belk College of Business, says low interest rates and dropping gas prices will help fuel continued growth. He issued his forecast on Tuesday.

A recent forecast for the national economy from the American Institute for Certified Public Accountants was not as optimistic.

“Signs are pointing to a stable new year for the N.C. economy. In 2016, the North Carolina economy is expected to increase by an inflation-adjusted rate of 2.5 percent over the 2015 level,” Connaughton said. “This growth in 2016 follows four years of steady growth in North Carolina Gross State Product.”

Connaughton projects first quarter growth of 2.6 percent for the N.C. Gross State Product followed by 2.7 percent in the second, 1.8 percent in the third and 2.8 percent in the fourth.

His forecasts are based on 15 economic factors, virtually all of which are expected to produce growth in 2016.

However, Connaughton does have concerns about the state’s work force.

“Because of several long-term trends that are now emerging, we need to recalibrate our sense of what level of real GDP growth we can expect,” he explained.

“There are a number of factors responsible for slowing down the potential long-term growth rate related to the aging of the labor force,” he said. “Baby Boomers are reaching retirement age and when they retire, they reduce their level of purchases, thus reducing overall consumption and lowering economic growth. Second, when Baby Boomers retire, there is a reduction in the absolute size of the labor force, thus reducing potential GDP and lowering economic growth. Third, labor productivity has averaged only 1.3 percent growth per year since 2007. This is down considerably compared to the 2000 to 2007 average of 2.6 percent.”

The full Forecast report is available at belkcollege.uncc.edu/forecast.

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