RALEIGH – A new forecast of the direction of North Carolina’s economy fell in July 2021, after steady gains in the first six months of the year.
The NCSU Index of North Carolina Leading Economic Indicators, which forecasts the state’s economy direction some four to six months in advance, drops 0.4% in July.
The fall was due to a 20% increase in initial jobless claims and a 9.2% drop in building permits, according to the monthly report compiled by Dr. Mike Walden, professor emeritus at N.C. State.
A 0.1% increase in June 2021 compared to May 2021 came with a 25.4% decline in inital jobless claims and an increase of 29.3% in new building permits, last month’s report found.
However, there is some positive news, Walden notest.
Whereas the June 2021 report found that manufacturing hours and manufacturing earnings declined, the July report found that those metrics, which contribute to the overall index, both increased from June.
“Throughout most of the year, the Index has stayed within a narrow range, suggesting continued growth at an even pace,” the report reads. “Of course, there can be surprises that bump the growth rate up or push it down.”
Despite the decline, Walden told WRAL TechWire that “the outlook has been consistent about the current improvement in the economy continuing.”
Here’s a look at the numbers:
“The pandemic continues to make economic forecasting difficult,” Walden said. “The best projection is economic growth will continue, yet either good or bad surprises from the virus can change this outlook.”
A good surprise, said Walden, would be a sharp decline in new COVID-19 cases.
A bad surprise would be continued new cases, including new cases of the Delta variant, said Walden.