BOONE—Economic activity in Western North Carolina, as measured by the Western North Carolina Economic Index, increased substantially in June, rising 0.9 percent for the month. The gain recovers losses that occurred early in 2007.

The index, which tracks the level of economic activity in 25 western North Carolina counties, is compiled at Appalachian State University.

“The jump in activity was the largest monthly increase in three years,” said Todd Cherry, an economics professor in Appalachian’s Walker College of Business and co-author of the report. Cherry also is a Faculty Fellow at the Institute of Emerging Issues at N.C. State University. “We have finally dug ourselves out of the hole we fell into early in the year.”

Regional job growth was strong, according to Cherry, but the northwest counties of Wilkes, Alleghany and Ashe had sizable losses. “While we also had a big jump in job growth in June, we are still down in terms of jobs for the year.”

According to the report, the WNC economy still lags that of the nation, growing at an annual rate of 1.4 percent during the first half of the year, while the national economy grew 2.0 percent during the same period.

Regional employment gained more ground relative to the state. Seasonally adjusted employment for WNC increased 0.55 percent for the month, while statewide employment showed a marginal increase of 0.05 percent for the month.

Eighteen of the 25 WNC counties experienced job growth in June. Jackson and Swain counties had the largest employment gains (1.38 and 1.35 percent), while the largest job losses were in Wilkes, Alleghany and Ashe counties (0.85, 0.58 and 0.81 percent).

The seasonally adjusted rate of unemployment for the region increased 0.1 percentage points to 5.1 in June 2007. The North Carolina rate also increased 0.1 points to 4.9 percent, while the national unemployment rate remained unchanged for the third consecutive month at 4.5 percent.

The seasonally adjusted unemployment rate within the region’s rural counties fell 0.1 percentage points to 5.4 percent in June. The unemployment rate increased 0.1 points in both of the region’s metro areas—registering 3.8 percent in Asheville and 6.1 percent in Hickory-Morganton-Lenoir.

County-level, seasonally adjusted unemployment rates decreased in 12 of the 25 WNC counties during June. Only four counties had lower unemployment rates than 12 months ago.

Polk, Henderson and Watauga counties had the lowest unemployment rates in June (3.65, 3.66 and 3.78 percent). Graham, Rutherford and Mitchell counties had the highest rates (9.00, 7.37 and 7.35 percent).

The largest declines in seasonally adjusted unemployment rates were in Wilkes, Alleghany and Alexander counties (0.41, 0.40 and 0.22 points). The biggest increases were in Cherokee, Watauga and Rutherford counties (0.44, 0.24 and 0.22 points).

Graham County has experienced the largest increase in unemployment rates during the past 12 months (2.47 points), while Rutherford County has had the biggest drop over this period (0.69 points).

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, fell 21.1 percent in June. Initial claims decreased in both metro areas—down 9.5 percent in Asheville and 25.0 percent in Hickory-Morganton-Lenoir.

The WNC Index and Report is a cooperative effort by AdvantageWest-North Carolina, Appalachian’s Walker College of Business and the Appalachian Regional Development Institute. The report provides a monthly account of economic conditions for Western North Carolina. It typically is released the fifth week following the end of each month.

Cherry is assisted by coauthors John Dawson of the Department of Economics and Rich Crepeau of the Department of Geography and Planning.

###