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Winston-Salem, N.C.-Area Economy Strengthening, Expert Projects

Posted on: Thursday, 1 December 2005, 21:00 CST

By Richard Craver, Winston-Salem Journal, N.C.

Dec. 2--The combination of a strengthening job market and a resilient consumer base has convinced a Triad economist that the region has shifted out of recovery mode and into an expansion.

Don Jud, an emeritus professor of economics at the University of North Carolina at Greensboro, said yesterday that he based his projection on the surge in economic activity as measured by his Triad Business Index.

The index, a monthly economic evaluation of eight Triad counties, increased by 0.5 basis points in October to a record 137.6. The index has risen 5.4 percent since October 2004.

"We're definitely not languishing economically as we have most of the past four years," Jud said. "We ought to be optimistic about the economy in 2006 even if the growth rate slows somewhat.

"There are a number of economic indicators, in particular consumer spending and job growth, where the Triad is once again exceeding the economic pace of the nation."

Consumer spending in the Triad rose 0.3 basis points in October to nearly $1.9 billion. It is up nearly 5 percent from October 2004 compared with 1.3 percent in the nation.

The Triad had a net gain of 700 jobs during October, primarily in education and health services and leisure. Since October 2004, there has been a net gain of 8,500 jobs, primarily in the service sector and construction. The Triad's manufacturing base has been unchanged in the past year at 112,100 workers.

Initial claims for unemployment benefits in the Triad declined 1.9 percent in October and are down 19 percent from a year ago.

The value of residential building permits was unchanged during October at $132.1 million, but the value of the permits is up 3.7 percent compared with October 2004.

Housing prices are up 4.5 percent in the Winston-Salem metropolitan statistical area in the past year compared with 4.5 percent in the Raleigh-Cary MSA, 3.7 percent in Charlotte-Gastonia-Salisbury MSA and 3.2 percent in Greensboro-High Point MSA.

"I was fully prepared to be pessimistic about the local economy given the impact of higher energy prices, inflation concerns and the hurricanes," Jud said. "I thought a heavier debt load would continue to weigh down consumers.

"But most consumers haven't retrenched their spending habits. And a more than 4 percent gain in productivity in the past year should eventually lead to more workers moving from temporary to full-time employment as employers look to secure their best workers in a tightening job market."

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Source: Winston-Salem Journal

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