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Economic Growth Continues in WNC Despite Employment Declines

BOONE–Despite a decline in employment, Western North Carolina’s economy grew 0.2 percent to 109.1 in May, according to the Western North Carolina Economic Index and Report.

The index, which tracks economic activity in 25 western counties, has increased at a healthy annual rate of 5 percent since the beginning of the year. The index is compiled at Appalachian State University’s Walker College of Business.

Todd Cherry, an economics professor at Appalachian and one of the report’s authors, says job growth continues to be a weak link in the region’s economy.

” The region seems unable to build any momentum for job creation,” Cherry said. “Productivity gains and increased hours are continuing to allowing businesses to do more without hiring new employees.” For instance, manufacturing data for Asheville in May shows 13,900 workers employed in the manufacturing sector averaged a 46-hour workweek.

Although seasonally adjusted employment in the region fell 0.4 percent in May, Cherry says a one-month shift does not indicate a trend. “With WNC employment, we are in a pattern of one step forward, one step back,” he said.

Statewide, employment fell 0.2 percent. Employment in Asheville fell 0.7 percent while employment in the Hickory-Morganton-Lenoir area was virtually unchanged.

Employment declined in 22 of the region’s 25 counties, according to the report. Only Burke, Catawba and McDowell counties recorded job growth. The largest job losses occurred in Alleghany, Avery, Wilkes and Yancey counties.

The seasonally adjusted unemployment rate for the region and state held steady at 5.3 percent, slightly less than unemployment across the nation, which was 5.6 percent. At the county level, 17 of the 25 counties in western North Carolina saw seasonally adjusted unemployment rates rise. Five counties had unemployment rates above 7.0 percent, while nine counties had rates below 4.0 percent.

” Unemployment certainly has experienced a strong downward trend in recent months,” Cherry said. “Unemployment by nature will level off and that may be what is happening with the regional rate being 5.3 percent.”

Twenty-three of the 25 counties had lower unemployment than a year ago with the exception of Rutherford and Madison counties.

Seasonally adjusted initial claims for unemployment insurance, a leading indicator of unemployment, increased 8.8 percent across the region in May. In the metro areas, claims decreased 9.8 percent in Asheville and increased 16.7 percent in Hickory-Morganton-Lenoir.

The WNC Economic Index and Report provides a monthly account of economic conditions for Western North Carolina. It typically is released the fifth week following each month. For more information, visit www.business.appstate.edu/wncindex.asp.

The WNC Economic Index and Report is a cooperative effort by AdvantageWest-North Carolina, and Appalachian State University’s Walker College of Business and Appalachian Regional Development Institute.

Cherry is assisted by co-authors John Dawson of the Walker College of Business and College of Arts and Sciences professor Rich Crepeau.

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