Published: Nov 05, 2011 05:45 PM
Modified: Nov 05, 2011 05:43 PM
Cary's economy continues to fare better than the state and nation's, but the town still is subject to the ups and downs of a boggy recovery. In several key areas, the town and state have performed worse in 2011 than in 2010.
"Last year, the national economy was on the long road back, the state economy was doing better and the local economy was leading the comeback," Ted Abernathy, director of the Southern Growth Policies Board, told the Cary Chamber of Commerce on Wednesday morning. "Now, the national economy is maybe at a rest stop ... the state economy is worse than a year ago, and the local economy is still leading the state, but we're not leading it at the pace we'd like to."
Cary's unemployment rate floats several percentage points below the state's, bouncing between 6 percent and 6.5 percent since June, while the state's rate now is 10.5 percent. Both state and town unemployment rates have increased in 2011 after falling throughout 2010.
The tepid forecast wasn't news to local business owners, who had assembled next door for a business expo hosted by the Chamber of Commerce.
BP Studios, a Web and software design service based in Cary, shed full-time employees as the downturn approached and has stayed lean through the last few years, according to owner Drew Robison.
Robison anticipated a slight improvement in the economy in the next year, but the company won't be making many bets as it maintains "survival mode."
"You're living that world," Robison said, while analysts are "just reflecting on what you live."
Abernathy said he found some signs of economic strength in the area. The state's gross domestic product - the combined value of the goods and services it produced - in 2009 and 2010 increased by 3.4 percent, one of the region's fastest rates.
Of the Southern metropolitan areas, Raleigh-Cary posted the strongest GDP growth of 2010 at 5.2 percent. "That's good news for our companies," Abernathy said. Last year was one of the most profitable ever for the U.S. business sector, he said.
Yet Raleigh-area residents are feeling the strain, with wages decreasing by about 5 percent, adjusted for inflation, from July 2010 to July 2011.
Local real-estate markets are staid, Abernathy said. The value of new construction permits in Cary has dipped about 16 percent in 2011 compared to 2010, according to his presentation.
The town saw 6.4 percent fewer new homes built in the year's first nine months compared to 2010, though the numbers were better than 2009. The number of Cary homes sold has slid each year since the recession, according to Abernathy, but home prices continued to rise.
This year's numbers were "not a recovery, but there's no degradation there either," Abernathy said. He later said that western Wake County governments, like Cary, have been buffered by good credit ratings and planning."This is just like a merry-go-round or musical chairs," he said in an interview. "If it stops and you've planned on growth, then you're in trouble."
Overall, he said, the country should expect slow economic growth and, somewhere down the road, another possible dip. Continued turmoil around national debts in Europe also could affect American markets and businesses, he said.
N.C. State University Economist Michael Walden has offered a similar outlook. The Walden Index, a compilation of key North Carolina economic indicators, is now at its lowest point since spring 2009, though it remains well above that most recent bottom-out.
"While not necessarily flashing a recessionary warning, the index does suggest a continued challenging economy with modest improvement - at best - in the outlook," Walden wrote in a September report.