BOONE—Western North Carolina’s economy remains weak, but June provided good news for the region. Economic activity, as measured by the Western North Carolina Economic Index and Report, increased 0.4 percent in June. In addition, the region’s economy rebounded in the second quarter of 2008 after two consecutive quarters of non-growth.

While the regional economy performed better in the second quarter of 2008, overall the region’s economic status remains weak. “Employment is down from the beginning of 2008, unemployment is 0.6 points higher, and the number of residential building permits has fallen dramatically,” said Todd Cherry, a professor in the Department of Economics at Appalachian State University and a co-author of the report.

According to the index, the regional economy declined in the fourth quarter of 2007 and was flat in the first quarter of 2008. “There was a contraction in the regional economy, and it is too early to determine whether it was the bottom of this downturn,” Cherry said.

Seasonally adjusted employment for WNC increased slightly in June—up 0.06 percent. Regional employment increased 0.17 during the second quarter of 2008, but is still down 0.24 percent from the beginning of 2008. Statewide employment fell 0.1 percent in June.

“Although the number of jobs increased in June, regional employment has been falling over the past year. We have about 6,000 fewer jobs in the region today than 12 months ago,” Cherry said.

Fourteen of the 25 WNC counties experienced a net job loss in June. Wilkes, Graham and Caldwell counties had the largest job losses (0.62 and 0.32 percent.). Alleghany, Ashe and Watauga counties gained the most jobs (1.11, 0.86 and 0.76 percent).

Regional unemployment remained unchanged at 6.0 percent in June. The rate is 0.6 percent points higher than three months ago and 1.3 points higher than 12 months ago. “Last year, only three counties in the 25-county region had unemployment rates higher than 7.0 percent. Now, nine counties do,” Cherry said.

The state unemployment rate increased 0.1 points, registering 6.0 percent for the month. The national unemployment rate remained unchanged at 5.5 percent.

The seasonally adjusted unemployment rate within the region’s rural counties increased 0.1 points to 6.2 percent in June. Unemployment remained unchanged in the region’s metro areas, registering 4.7 percent in Asheville and 7.2 percent in the Hickory-Morganton-Lenoir area. Unemployment has increased in both metro areas over the past 12 months—up 1.1 points in Asheville and up 1.3 points in Hickory-Morganton-Lenoir.

Seasonally adjusted unemployment was higher in eight of the 25 WNC counties. Swain, Rutherford and Graham counties had the largest increases in unemployment in June (1.15, 0.37 and 0.27 points). Macon, Mitchell and Jackson counties had the largest declines in rates (0.51, 0.33 and 0.29 points).

All 25 counties have higher unemployment rates than 12 months ago. Madison, Graham and Wilkes counties have experienced the largest increases in unemployment (1.66, 1.63 and 1.50 points). Rutherford and Watauga counties have had the smallest increases in rates (0.24 and 0.36 points).

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, fell 0.4 percent in June. Initial claims increased 11.8 percent in Asheville, and increased 5.9 percent in Hickory-Morganton-Lenoir.

The WNC Index and Report is a cooperative effort of AdvantageWest North Carolina and the Center for Economic Research and Policy Analysis in Appalachian’s Walker College of Business. The WNC Index and Report is compiled and written by Cherry, John W. Dawson of the Department of Economics and Richard Crepeau of the Department of Geography and Planning at Appalachian.

The index and report provides a monthly account of economic conditions for 25 counties in western North Carolina and is typically released the fifth week following each month. For more information, visit www.business.appstate.edu/economics/wncindex/index.php

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