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WNC economy grows at a sluggish pace

BOONE—After stumbling at the end of 2012, the regional economy began to regain its footing in the first quarter of the year, according to the Western North Carolina Economic Index, compiled by the Center for Economic Research and Policy Analysis at Appalachian State University. Regional economic activity increased 0.4 percent during the first quarter of 2013.

“We began to see modest gains early in the year and things picked up a bit more in March” according to Todd Cherry, director of the center and a professor in the Department of Economics in Appalachian’s Walker College of Business. “The regional economy remains sluggish. While unemployment is down, job creation has fallen off.”

During March, economic activity as measured by the index increased by 0.2 percent. This was the second consecutive monthly increase in the index, which tracks the level of economic activity in 25 western North Carolina counties.

Seasonally adjusted employment for WNC decreased slightly by 0.3 percent in March. Statewide adjusted employment also decreased by 0.3 percent.

Eighteen counties across the region experienced decreases in seasonally adjusted county-level employment, with the largest losses occurring in Alleghany, McDowell and Ashe counties. Conversely, Yancey, Jackson and Swain counties had the largest employment increases.

Cherry said the lack of real growth in job creation means the region’s economy remains fragile. “The middle of 2012 was promising, but conditions retreated at the end of the year,” he said. “We seemed to have regained some momentum in 2013, but it is too early to see a meaningful trend.”

Seasonally adjusted WNC unemployment registered 9.2 percent in March – down by 0.2 points from the previous month. The state unemployment rate also decreased by 0.2 points from the previous month to 9.2 percent, while the national rate fell by 0.1 points to 7.7 percent. While unemployment fell in the region, Cherry said it was because people left the workforce rather than through new job creation.

The seasonally adjusted unemployment rate within the region’s rural counties decreased by 0.1 points to 10.6 percent in March. In the region’s metro areas, unemployment increased by 0.1 points to 7.1 percent in Asheville and by 0.2 points in Hickory-Morganton-Lenoir to 10.3.

County-level seasonally adjusted unemployment rates were highest in Graham, Swain, and Mitchell counties with rates at 16.2, 13.9 and 13.1 percent, respectively. Rates were lowest in Henderson, Polk and Buncombe counties at 6.6, 6.9 and 7.0 percent.

Seasonally adjusted unemployment rates decreased in 17 of the 25 WNC counties. Only five counties registered an increase in the monthly unemployment rate. Rutherford, Haywood and Cherokee recorded the largest decreases in unemployment rates (0.7, 0.5, and 0.3 points). Swain, Ashe, Mitchell, Avery and Alleghany all recorded increases of 0.2 points.

Looking over the last 12-month period, 18 WNC counties experienced decreases in unemployment. Unemployment rates in Madison, Caldwell and Alexander experiencing the largest improvements. Mitchell, Ashe and Yancey counties recorded the increases in seasonally adjusted unemployment over the previous 12 months (2.2, 0.7 and 0.5 points).

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, decreased by 9.3 percent in March. Initial claims increased by 0.5 percent in Asheville but fell by 4.1 percent in Hickory-Morganton-Lenoir.

The WNC Economic Index and Report provides a monthly account of economic conditions for the 25 counties in western North Carolina. It is a cooperative effort by the Center for Economic Research and Policy Analysis at Appalachian and Advantage West.