Everyone wants to know where the economy is going. N.C. State University’s Mike Walden outlines what his leading economic indicator index suggests for North Carolina.
“Well … I developed this index a couple of years ago to give us a heads up for our state economy and where it’s going. It’s composed of five data items: a national leading index (because we are obviously tied into the national economy), new jobless claims in the state, new building permits in the state and hours and earnings of workers in manufacturing in our state.
“The latest number for the index using July data — the latest we have — was little change from the month before. In fact … the index has moved very, very little over the last year. What this tells us is that there’s really no definitive change in the direction of the state economy. That is, we’re probably going to continue to grow — and we have been growing — but at a rather modest slow pace.
“Now we did find one major change in the index in the recent month: That is, we did see a slowing in manufacturing. Manufacturing has actually grown quite a bit in North Carolina over the last couple of years. And I think what this is reflecting is a slowing of international trade. Manufacturing is very dependent upon exports. If we’re seeing slowing of economic growth, for example, in Europe, that’s going to affect exports from our manufacturing sector.
“Very important though, although the index has little change, it is not — it is not — signaling a new recession.”