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Regional Economy Shows Signs of Strength

BOONE – Western North Carolina’s faltering economy may be turning a corner, according to data compiled in the Western North Carolina Economic Index.

An upswing in job growth during the past months is an encouraging trend, according to Todd Cherry, an author of the report compiled at Appalachian State University. Cherry is the Harlan E. Boyles Professor in Appalachian’s Walker College of Business.

“The regional economy has been performing well at the aggregate level for some time, but a weak labor market has been a persistent problem for many parts of the region,” Cherry said. “Regional job growth has picked up over the past two quarters. The region has seen job growth in six of the last seven months, and the region’s employment numbers are finally returning to those recorded prior to the 2000-01 recession.”

According to the report, regional economic activity grew 0.3 percent in March, and has increased at an annual rate of 3.2 percent in the first quarter of 2005. The region’s seasonally adjusted employment rate increased 0.3 percent.

Twenty-two of the 25 counties tracked in the report experienced job growth in March, with the largest gains occurring in the northwestern counties and counties surrounding Asheville.

“It appears the labor market is finally recovering a bit as well, though there is still a way to go,” Cherry said. “This is the strongest performance of the labor market in a long time. While it could be better, it does appear we may be turning a corner.”

The seasonally adjusted unemployment rate within the region decreased 0.2 percentage points to 5.6 percent in March. The region’s metro area posted a 0.2 percentage point decline in the seasonally adjusted unemployment rate to 4.0 percent for Asheville.

The rate decreased 0.4 percentage points to 6.4 percent for the Hickory-Morganton-Lenoir area.

The county-level seasonally adjusted unemployment rate decreased in eight of the 25 WNC counties. And while unemployment increased in 17 of the 25 counties, overall unemployment rates for the region fell.

“Unemployment continues to trend downward for the region, though it may be a bit volatile and slower because previously discouraged people may re-enter a more appealing labor force,” Cherry said.

Rutherford, Mitchell and Graham counties had the highest unemployment rates in March, while Watauga, Jackson and Clay counties had the lowest.

During the past 12 months, Transylvania and Rutherford counties had the largest drop in unemployment rates—2.5 and 2.07 percent respectively.

The WNC Economic Index and Report provides a monthly account of economic conditions for Western North Carolina. It typically is released the fifth week following the end of each month.

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The WNC Economic Index and Report is a cooperative effort by AdvantageWest-North Carolina, and Appalachian State University’s Walker College of Business and Appalachian Regional Development Institute. Cherry is assisted by co-authors John Dawson of the Walker College of Business and College of Arts and Sciences professor Rich Crepeau.