The quarterly Barings/UNC Charlotte Economic Forecast was presented by UNC Charlotte economist John Connaughton Thursday. The report shows during the second quarter of 2020, the North Carolina economy had its biggest decline in Gross State Product since the Great Depression.
“Going forward from the middle of 2020, the No. 1 question is how long before the economy gets back to its 2019 level and when does the unemployment rate again approach full employment,” Connaughton said.
Connaughton said it will likely take until mid-2022 before the Gross Domestic Product recovers, and it could take the unemployment rate even longer to drop below 5%.
The report says North Carolina’s unemployment rate is expected to peak at 17% in May, and by December is expected to drop to around 9.9% Seasonally adjusted nonagricultural employment is expected to decrease by 6.5% in North Carolina compared to December 2019, a loss of 300,000 net jobs.
According to the report, the sectors with the largest expected employment decreases in 2020 are hospitality and leisure services (-25.8%), other services (-7.8%), transportation and warehousing (-7.3%), retail trade (-7%) and manufacturing (-6%).
“Going forward, the one takeaway from this 10-year expansion is that the North Carolina growth rate over the period has trailed the U.S. 10-year average growth rate of 2.3%,” Connaughton said. “This is a consideration as we emerge from the COVID-19 shutdown. So, the big question is whether the North Carolina recovery will again be weaker than the U.S. recovery. This year and 2021 will be very interesting and very uncertain years.”
The full report is available here.
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