RALEIGH – North Carolina’s economy is slowing, according to the latest index tracking leading economic indicators in the state.
The index, published monthly by Dr. Mike Walden, an economist and a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University, forecasts the direction of North Carolina’s economy four to six months into the future.
For December 2022, the indicators again show a slowing economy, following a modest gain the prior month. Since May 2022, the trendline has been steadily downward, even with monthly shifts, Walden told WRAL TechWire.
“There is a clear signal the state economy is slowing,” said Walden. “But the good news is, compared to the last two recessions, the Index’s retreat has been modest.”
Much of the December decline is due to a retreat in the number of building permits filed, which fell 26%. Still, other factors shifted the index, including a decline in manufacturing hours, though manufacturing earnings increased.
Compared to a year ago, the index has decreased by 4.6%.
“This gives hope that – if a recession does occur – it will not nearly be as harsh as recent economic downturns,” Walden told WRAL TechWire.
US Economy is slowing, too
And while the US economy grew more than expected during the fourth quarter of 2022, Walden told WRAL TechWire that it is still slowing.
Gross domestic product, or GDP, a broad measure of economic activity increased at an annualized rate of 2.9% in the fourth quarter, according to data released by the United States Department of Commerce on Thursday.
But that growth outpaced expectations, as many expected the economy to show 2.6% growth. And it’s lower than the 3.2% growth seen in the third quarter of 2022.
“We are not in a recession now,” Walden told WRAL TechWire. “However, the new report does not change my forecast of a high probability of a recession in the second half of this year. But, if a recession does occur, it will be short and mild.”