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ECONOMIC RECOVERY IN TRIANGLE BOOSTED BY JOB GROWTH, HOME-BUILDING

ECONOMIC RECOVERY IN TRIANGLE BOOSTED BY JOB GROWTH, HOME-BUILDING
 RALEIGH, N.C., June 2 /PRNewswire/ -- Employment growth and the strongest home-building in several years are leading an economic recovery that is stronger in the Triangle -- and the state -- than the rest of the country.
 Retail sales and car sales also are up in the Triangle, while commercial construction continues to be slow as office space is absorbed. These were among the highlights of the Perspectives economic briefing for the Triangle presented here today by Jim Fain, First Union's Raleigh area executive.
 "We are in a recovery that is slow but increasingly sure, and the Triangle has some exemplary strengths, played against the national economy," Fain said. "There are indications that people have migrated to the Triangle during the recession, finding this a more promising place to live than other metropolitan areas of the country hit harder by the recession. If that proves true, those people will play an important role in this area's future economic strength."
 Fain was joined by David Orr, First Union's chief economist, who gave the state and national economic reports.
 "North Carolina's economy has clearly outperformed the national averages over the past year," Orr said. "The state's rebound was stronger and more sustained, not faltering in late 1991 because we were not greatly exposed to the industries that had such dramatic layoffs -- automotive, defense and computer-related industries."
 Non-farm jobs in April were 1.0 percent above April of 1991 in North Carolina, versus 0.3 percent in the nation. The N.C. unemployment rate in April was 5.4 percent, down from 5.7 percent in April 1991, whereas the U.S. rate was 7.2 percent, up from 6.6 percent a year earlier. Personal income in the fourth quarter (the latest available) grew 5.6 percent in North Carolina, while nationally it grew only 2.8 percent.
 Single-family home permits through April were up 49 percent in North Carolina, compared to the first four months of 1991. Nationally, single-family home permits were up 32 percent through April, compared with the first four months of 1991. February retail sales in North Carolina were up 7.3 percent year-to-year, compared with the national gain of only 4.4 percent.
 In the Triangle, Fain said the number of jobs started growing again last July, averaging an estimated 1.5 percent growth for the past nine months. In April, the state estimated 411,700 jobs in the Triangle, 3,300 more than a year ago. April unemployment was 3.6 percent, down from 4.1 percent in March, but up slightly from 3.2 percent in April 1991.
 "It's clear that the jobless peak here came last June, if you adjust for seasonal ups and downs," Fain said. "There also are fewer new claims for unemployment and more job listings. In some cases, there's even a problem of finding enough qualified workers to fill the jobs."
 Fain noted that it's possible for both employment and unemployment to increase when an area has a growing labor force -- the number of employed plus those looking for work. That growth is most likely coming from an unusual in- migration to the Triangle, Fain said.
 He cited an increase in out-of-state inquiries for newcomer and job information, a 17 percent increase in new connections made by Carolina Power & Light last year, and an increase in apartment occupancy rates.
 Single-family home permits were up 70 percent in the Triangle through February, compared to last year. Wake County permitted 798, the most since 1986; Durham permitted 162, the best January and February since 1989; and Orange County permitted 111 homes, the most since 1986.
 "It appears what we've seen in early 1992 is builders replacing inventory as home buyers rush to the market to beat interest rate increases," Fain said. New-home prices are beginning to go up, Fain noted, inflated by a 40 percent increase in lumber prices since fall.
 Sales of existing homes in Wake and Durham counties also are up almost 17 percent through April, compared to last year. In the multi-family sector, 170 units were permitted in the Triangle through February, compared to zero last year, during the Gulf War. "A variety of factors, including income, are making multifamily a more appealing investment to developers," Fain said. "Occupancy here is high, with current vacancy rates estimated at 5 percent. But this year's activity still may barely beat last year's relatively low pace of permitting."
 Commercial permitting in Wake County through February totaled $28.1 million, down 1.5 percent from last year. "With the exception of 1990, when our major downtown projects were permitted, that's actually above the average pace for the Raleigh area since the mid-'80s," Fain said. Durham's permits totaled $4.7 million, the lowest since at least 1985, while Orange County's were up 230 percent to $1.2 million, boosted by retirement, recreation and restaurant permits.
 Retail sales through February (reflected in N.C.'s March report) totaled $1.2 billion, with all three counties reporting increases. "However, retail sales last year did not fall in our two largest counties as they did in most other places during the start of the Gulf War, so we are going against relatively strong 1991 numbers," Fain said.
 New-car sales through April were up 9.5 percent in the Triangle to 12,394 units, with Wake and Orange counties reporting increases. Those numbers were boosted by fleet buyers, Fain said.
 Airport boarding at Raleigh-Durham International Airport were 1.2 percent lower through April than the first four months of last year and 4 percent lower than 1990. That trend is consistent with lackluster boarding nationally since 1990, but contrasts with strong boarding in other N.C. metropolitan areas early this year.
 In its forecast for the Triangle, First Union is calling for:
 -- Continued slowness in commercial construction, with any increases coming toward the end of the year;
 -- Possibly even fewer apartment units permitted this year than last year, with major gains coming in 1993, or possibly late 1992;
 -- Single-family home permits well above last year, although not at the pace of first quarter;
 -- Possibly some improvement in airline travel, boosted by the current fare wars and improved business and consumer confidence;
 -- Lower unemployment, possibly in the low 3 percent range by fall, and rising employment, with record employment likely in third quarter;
 -- New-car sales gains of 10-15 percent;
 -- Retail sales gains of 8-10 percent.
 First Union also tracks the economy on an on-going basis in Charlotte, the Triad, Western and Southeastern North Carolina. First Union National Bank is a principal subsidiary of Charlotte-based First Union Corporation (NYSE: FTU FTUpr) and operates 270 offices statewide.
 -0- 6/2/92
 /CONTACT: (Media) Sandy Deem, First Union Corporation, 704-374-2710/
 (FTU) CO: First Union Corporation ST: North Carolina IN: FIN SU: ECO


CM -- CH006 -- 6262 06/02/92 13:52 EDT
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Date:Jun 2, 1992
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