CHAPEL HILL, N.C. - Despite recent hurricanes, the North Carolina economy just keeps on setting new records, a University of North Carolina at Chapel Hill financial expert says. In fact, the economic output of the state's 7.5 million people in 1999 probably will exceed that of Russia's 140 million people and greatly surpass that of Indonesia's 200 million.
"North Carolina maintains its international reputation as an excellent state in which to locate a facility because employees in North Carolina have a great reputation for giving a full day's work for a full day's pay," said Dr. James Smith. "So long as that tradition continues, North Carolina should continue to do extremely well in the global economic competition."
Smith is professor of finance at UNC-CH's Kenan-Flagler Business School, chief economist for the National Association of Realtors and, according to The Wall Street Journal, the nation's most accurate economic forecaster twice in the past three years.
He described the state's economic health in the October issue of "Business Forecast," a bimonthly newsletter he writes for UNC-CH.
On June 7, the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce released gross state product (GSP) numbers for every state for 1997, Smith said. The data are analogous to gross domestic product for the nation as a whole.
"North Carolina had a GSP of $218.9 billion in 1997," he said. "This represented 2.7 percent of the U.S. total, up slightly from our share of 2.6 percent in 1992."
California -- the first state to hit the $1 trillion GSP milestone -- represented 12.7 percent of the total U.S. economic output and was followed by New York, Texas, Illinois and Florida. North Carolina ranked 12th, just behind Massachusetts and Georgia and just ahead of Virginia.
"This level of economic activity would make North Carolina a major player at the (upcoming) World Trade Organization conference if we were a separate country," Smith said.
Throughout the current economic expansion, which began in March 1991, the state's economy has shown both population and income growth above the national average, he said.
Total N.C. personal income was running at a seasonally adjusted rate of $188.3 billion in the first quarter, the analyst said. That was up almost 5.5 percent, from the same quarter in 1998, and in line with the national increase of 5.48 percent for that period.
"North Carolina really looks good on the employment front," Smith wrote. "Bureau of Labor Statistics data for July showed that on a seasonally adjusted basis, the unemployment rate in North Carolina was 2.9 percent, well below the national average of 4.3 percent. We were one of 10 states with an unemployment rate below 3.0 percent."
In July, the Raleigh-Durham-Chapel Hill metropolitan statistical area (MSA) had the lowest unemployment rate in the state at 1.6 percent and tied for fourth in the country with two sites in Iowa, Cedar Rapids and Des Moines. The Hickory-Morganton-Lenoir MSA was in second place in the state in July with 2.1 percent, followed by the Asheville MSA at 2.2 percent, the Greensboro-Winston-Salem-High Point MSA at 2.5 percent, the Charlotte-Gastonia-Rock Hill, S.C., MSA at 2.8 percent and the Wilmington MSA at 3.1 percent.
MSAs above the state average in July were Jacksonville at 3.4 percent, Fayetteville and Goldsboro at 3.9 percent, Greenville at 4.6 percent and Rocky Mount at 5.8 percent.
"That was a huge improvement for Rocky Mount from their 6.3 percent rate in June and their 7.6 percent rate in July 1998," Smith said. "Data on employment and unemployment for metropolitan statistical areas are not available on a seasonally adjusted basis."
Note: Smith can be reached at (202) 383-1184 or (919) 962-3176. As time allows, he's willing to discuss most economic issues with reporters. E-mail: jsmith@realtors.org . Fax: (202) 383-7568.
Contact: David Williamson, (919) 962-8596.