Fourth Quarter 2024 North Carolina Economic Forecast
State shows fourth year of economic growth, sees impact from Hurricane Helene
2024 marks the fourth year of economic growth in North Carolina since the COVID-19 pandemic recession of 2020, even as Hurricane Helene’s destruction in the western part of the state dampened the state’s overall economy in the fourth quarter.
“Unlike coastal areas, most businesses and households in the western part of North Carolina do not have flood insurance,” said John Connaughton, UNC Charlotte professor of financial economics. “Normally, rebuilding after a natural disaster stimulates the economy, but in this case the lack of insurance could put a burden on small businesses and households and also delay the rebuilding stimulus on the economy.”
Connaughton presented these and other findings from the UNC Charlotte North Carolina Economic Forecast 2024 Fourth Quarter Report at a community presentation Dec. 11 at The Dubois Center at UNC Charlotte Center City.
U.S. Federal Reserve policy is uncertain going forward, Connaughton said. After two reductions in the federal funds rate in the fall, the Federal Reserve is now wavering on rate policy. This uncertainty will likely have only a small impact on 2024, once final numbers are in, but could have greater impact in early 2025, depending on future policy, he said.
“We have seen the U.S. unemployment rate rise from 3.3% in May of 2023 to 4.1% in October of 2024,” he said. “As a result of the weakness in the labor market, the Federal Reserve has begun reducing interest rates. During 2025, depending on economic data, the Fed could continue with interest rate reductions by up to another 100 basis points by mid-year. However, if Congress does not begin to control fiscal spending, we are likely to see a return of inflation in 2025, which could disrupt the Fed’s plans.”
2025 Projections
For 2025, North Carolina’s real — inflation adjusted — Gross Domestic Product is forecast to increase by 2.3% over the 2024 level. All 15 of the state’s economic sectors are expected to experience output increases during 2025. GDP is the main measure of economic output. The sectors with the strongest projected growth rates are:
- Information: 4.9%
- Construction: 3.1%
- Mining: 2.9%
- Hospitality and leisure services: 2.8%
- Transportation, warehousing and utilities: 2.7%
- Nondurable goods manufacturing: 2.6%
- Business and professional services: 2.6%
North Carolina establishments are expected to add 53,400 net jobs in 2025, an increase of 1.1% over the December 2024 level. Thirteen of the state’s 14 nonagricultural sectors are expected to show employment growth during 2025. The sectors with the strongest projected increases are information at 5.7% and wholesale trade at 2.8%. The state’s 2025 unemployment rate is projected to rise slightly.
2024 Numbers
GDP should reach a level of $838,668.1 million in 2024, once final numbers are in. Real GDP is expected to increase by 3.5% over the 2023 level. Of the state’s 15 economic sectors, 12 are anticipated to grow during 2024. The sectors with the strongest anticipated growth rates are:
- Agriculture: 22.4%
- Mining: 9.0%
- Retail trade: 7.7%
- Construction: 6.6%
- Educational and Health Services: 5.4%
- Nondurable goods manufacturing: 5.1%
North Carolina establishments are expected to add 68,100 net jobs by year’s end, an increase of 1.4 percent over December 2023. Of the state’s 14 nonagricultural sectors, 10 are expected to show employment increases this year. The sectors with the strongest projected employment increases are education and health services at 3.7% and hospitality and leisure services at 2.6%. By December 2024, the state’s unemployment rate is expected to reach 3.9 percent.
The North Carolina Economic Forecast has been a leading source of economic information for more than 40 years, under Connaughton’s direction. UNC Charlotte’s Belk College of Business publishes this use-inspired research report each quarter.