BOONE—Western North Carolina’s economic activity remains weak, falling 0.2 percent in March and erasing earlier gains during the first two months of the year.

According to the WNC Economic Index compiled at Appalachian State University, the region’s economy remained flat for the first quarter of the year.

“We had some positive movement during the first two months of the year, but that was wiped out by the losses in March,” said Todd Cherry, an author of the report. Cherry is a professor of economics at Appalachian.

“The regional economy continues to teeter on the edge of a recession, but the main story is the magnitude and persistence of the economic weaknesses,” he said. “Recessions are designed by negative growth. The actual growth rate reveals much more.”

Cherry says the region’s job losses are troubling. “Looking at the employment numbers from the first quarter, Western North Carolina is not holding up as well as the rest of the state,” he said.

“The region lost nearly 3,000 jobs, or 0.5 percent of the workforce, during the first quarter of 2008.

The state lost about 13,500 jobs, but that represents 0.3 percent of the statewide workforce.”

Seasonally adjusted employment for WNC fell 0.25 percent in March, and declined 0.50 percent in the first quarter of 2008.

Thirteen of the 25 WNC counties experienced a net job loss in March. Graham, Haywood and Wilkes counties had the largest job losses (0.84, 0.51 and 0.51 percent). Ashe, Alexander and Catawba counties had the largest job gains (0.67, 0.55 and 0.41 percent.)

Regional unemployment was higher in March, exceeding that of the state and nation. In fact, unemployment increased throughout the region with 24 of the 25 WNC counties recording higher unemployment rates.

The seasonally adjusted rate of unemployment for the region increased 0.2 percentage points to 5.4 in March. The state unemployment rate also increased 0.2 points, registering 5.2 percent for the month. The national unemployment rate was 5.1 percent in March, up 0.3 points from the previous month.

The seasonally adjusted unemployment rate within the region’s rural counties increased 0.2 points to 5.5 percent in March. Unemployment was also higher in the region’s metro areas.

Asheville’s unemployment rate was 4.3 percent, up 0.2 points from February. The unemployment rate for Hickory-Morganton-Lenoir was 6.7 percent in March, up 0.3 points.

Cherokee, Graham and Alleghany counties had the largest increases in unemployment in March (0.98, 0.98 and 0.78 pts.).

Madison County was the only county in the region in which unemployment fell – down 0.03 points.

Twenty-three of the 25 counties have higher unemployment rates than 12 months ago.

Cherokee, Burke and Clay counties have experienced the largest increases in unemployment (2.03, 1.69 and 1.25 pts.).

Rutherford and Caldwell counties are the two counties that have lower rates than 12 months ago; down 0.72 and 0.41 points respectively.

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, fell 2.1 percent in March. Initial claims decreased 4.2 percent in Asheville, but increased 3.1 percent in Hickory-Morganton-Lenoir.

The WNC Index and Report, which tracks the level of economic activity in 25 western North Carolina counties, provides a monthly account of economic conditions for western North Carolina. It typically is released the fifth week following each month.

The WNC Index and Report is compiled and written by Cherry, the Harlan E. Boyles Professor in Appalachian’s Walker College of Business and a Faculty Fellow at the Institute of Emerging Issues at N.C. University, John W. Dawson of Appalachian’s Department of Economics and Richard Crepeau of the Department of Geography and Planning.

The WNC 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.

For more information, visit the report’s Web site at http://www.business.appstate.edu/economics/wncindex/index.php.

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