UNCW faculty announced at the Eighth Annual Economic Outlook Conference Oct. 11 that the local economy is expected to grow faster than the state and the national economy.

Economists predict that the Wilmington Metropolitan Statistical Area (MSA), including New Hanover, Pender and Brunswick counties, will see an economic growth rate of 2.4 percent in 2011 and 2.2 percent by the end of 2012.

In comparison, the state economy is expected to grow at a rate of 1.7 percent and the national economy at a rate of 1.6 percent in 2012.

The analysis incorporates data from areas such as retail sales, unemployment, airport traffic and real estate.

“We develop a number of statistical models that give us the forecast,” said William “Woody” Hall, professor of economics and senior economist with the Swain Center for Business and Economic Services, “but we don’t stop there.”

Hall and Ravija Badarinathi, professor of statistics in the UNCW Department of Information Systems and Operations Management, along with additional collaborators, then contact an anonymous panel of business owners and public officials and gauge their reaction to the results. “We come back with some sort of consensus and determine if we’re going in the right direction,” said Hall.

Although the local economy is doing better than the state and national economies, growth rates of the Wilmington MSA are still low compared to what they were before the 2008-09 national recession.

“In 2008 locally we had a decline in retail sales, we had a decline in traffic at the airport and we had a fairly dramatic rise in unemployment,” said Hall. He also mentioned what he called a bright spot amid the plummeting numbers—healthy activity at the state port facility.

Additionally, real estate was one of the hardest hit sectors during the mass recession on a local, statewide and national level, according to Hall. “We took our hits. The middle part of 2005 was the peak, and from then until the end of 2008 sales of single family homes fell dramatically—around 70 percent,” he said.

Now the local real estate sector remains steady. Home sales have not risen, but they have not declined either.

“Things aren’t going to get better until the real estate market starts to grow,” said Hall. “In order to rise you’ve got to stop falling. Somewhere between rising and falling there is some stability, and we’re in the middle there.”

One measure by which the local economy is doing worse than the national and state economies is unemployment. The most recent unemployment data from August 2011 indicate seasonally adjusted rates of 11.4 percent in Brunswick County, 10.3 percent in New Hanover County, 12.8 percent in Pender County, 10.1 percent in the state and 9.1 percent in the nation. Historical data demonstrate that economic output must grow at least three percent each year in order for unemployment rates to stabilize.

The local economy is on a slow, upward trajectory. Although the projected growth rate is half of what is was prior to the 2008-09 recession, the previous rates could not be sustained, according to Hall. “Those were atypical times. Those days aren’t coming back at least in my lifetime,” he said.

“A lot of people don’t want those days back because, in hindsight, they realize that isn’t sustainable,” said Hall. He quoted a line from a Blood, Sweat & Tears song—”what goes up, must come down.”

“A lot of people forget about the second part of that line,” he said.