Economist: State to continue slow recovery through 2013

CHARLOTTE – North Carolina will have its fourth year of slow but uninterrupted economic growth in 2013, UNC Charlotte economist John Connaughton reported Dec. 11 in his quarterly forecast for the state.

However, Connaughton cautioned that economic uncertainty in Europe and the ongoing negotiations on tax increases and the “fiscal cliff” may negatively affect the state and national economies in the coming year.

Connaughton, the Babson Capital professor of financial economics in the Belk College of Business, presented his quarterly forecast to more than 130 members of the Charlotte business community at a luncheon held at UNC Charlotte’s Center City campus.

2013 forecast

Connaughton expects the North Carolina economy to expand by an inflation-adjusted rate of 1.8 percent during 2013.

For 2013, first quarter GSP is expected to increase at an annualized real rate of 1.8 percent.  During the second quarter, GSP is expected to increase at an annualized real rate of 1.6 percent. In the third quarter, GSP is expected to record an annualized real growth rate of 1.7 percent. In the fourth quarter of 2013, GSP is expected to grow at an annualized real rate of 2.3 percent.

Fourteen of the state’s 15 economic sectors are forecast to experience output increases during 2013.

Connaughton also noted that tax uncertainty continues to weaken consumer and business confidence, adding to the Eurozone drag.

“The possibility of going over the ‘fiscal cliff’ on Jan.1, 2013, is an even greater concern,” he said. “Should Congress and the President not agree on a tax plan and the Bush tax cuts phase out and sequestration spending cuts begin, the modest growth currently forecast for 2013 becomes a recession.”

2013 job outlook

Seasonally adjusted nonagricultural employment in North Carolina is expected to reach 4,027,200 people in December 2013, an increase of 1.4 percent over the employment level in December 2012.  The state is expected to gain 56,700 net jobs during the year.

Ten of the state’s 14 nonagricultural sectors of the economy are expected to experience employment increases during 2013.

The full forecast report is available at Connaughton will present his next forecast report in March 2013.

– UNC Charlotte Public Relations

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