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STRONGER EMPLOYMENT, HOME-BUILDING, CAR SALES BOOST CHARLOTTE ECONOMY

STRONGER EMPLOYMENT, HOME-BUILDING, CAR SALES BOOST CHARLOTTE ECONOMY
 CHARLOTTE, N.C., July 23 /PRNewswire/ -- For the first time in 20 months, unemployment in the Charlotte MSA dropped from the same month a year ago, falling to 5.5 percent in May from 6.1 percent in May 1991. May employment was 611,800, up 13,600 from last May.
 Home-building here is the strongest it's been since 1987, although commercial construction continues to be slow. The strongest new-car sales in three years are boosting retail sales, although retail sales aren't growing as fast here as the rest of the state. These were among the highlights reported at the First Union Perspectives economic briefing today by Lee Keesler, First Union's Charlotte area executive.
 "All of these figures -- retail, car sales, housing and employment--are positive, but they may not be the swift, upward movement we want. They outline an economy where recovery is slow and steady," Keesler said.
 In May, an estimated 35,600 people were job-hunting in the MSA, including Mecklenburg, Gaston, Cabarrus, Lincoln, Rowan, Union and York counties. That's 3,300 fewer than a year ago. Since the first of the year, the total number of weeks of unemployment claims has been lower every month than in the same month last year. Keesler said, however, that June figures could show another rise in unemployment with the influx of new graduates in the job market.
 Single-family home permits in Mecklenburg County are up 46.7 percent through April to 1,579, the latest figure available from the state. More recent, local numbers show continued growth through June, creating a record first half.
 Most new homes built were pre-sold, typically to newcomers, rather than to "move-up" buyers already in the market. The number of existing home sales through the MLS increased 7.8 percent through June, partly because by the addition of Iredell County to the listing.
 "After absorbing pent-up demand from the past two years, the market is beginning to look more static now," Keesler said.
 Multifamily permits in Mecklenburg through April totaled 279, a 53.1 percent drop from the same period last year, and the lowest level in at least six years. Apartment vacancy rates are virtually unchanged, dropping only 0.9 percent from last fall to 10.2 percent.
 Commercial construction in Mecklenburg through April totaled $54.1 million, a 24.5 percent increase over the same period last year, but more than 40 percent below the average pace through the last half of the '80s.
 "Occupancy in almost every kind of commercial space -- except uptown -- is said to be tightening," Keesler said. "That will support rents and eventually close the gap between supply and demand, so that we expect the pace of nonresidential and apartment construction to pick sometime in 1993."
 After three years of declines, new-car sales are beginning to show gains. Sales in Mecklenburg through June totaled 17,984, up 16.6 percent over last year, and the best first half since 1989. Most of the increase is in fleet purchases by businesses and rental companies. Fleet sales now make up 54 percent of the market here, compared to 48 percent two years ago.
 "Our ratio of retail to fleet sales always is much higher than the national average of 20-25 percent, largely because of the airport," Keesler said. "And because activity at the airport continues to increase so rapidly, the number of rental cars there has too. . . . Some of the gain in fleet business also is because consumers are leasing more cars, and those vehicles officially are in fleets owned by leasing companies."
 Higher car sales accounted for about a third of the gain in retail sales in Mecklenburg County. Retail sales here grew 2.6 percent through April to almost $2.8 billion, compared to a 15 increase in the state. Surrounding counties show healthier retail gains: almost 7 percent in Gaston County, about 13.5 percent in Iredell and Cabarrus, and almost 16 percent in Union County.
 Boardings at Charlotte/Douglas International Airport (mostly business travel) through June were 15 percent higher than in 1991, totaling 4,476,611. June was an all-time record month for the airport, with 873,256 boardings.
 In its forecast, First Union is calling for:
 -- Retail sales and car sales to improve; the final gain
 will depend on the fourth quarter, and retailers think
 fourth quarter will depend on the election;
 -- New-home starts to increase a good bit by year's end, but
 not by as much as the mid-year increase; only about 200-
 350 apartment units probably will be permitted;
 -- Nonresidential construction to improve over last year;
 -- Airport activity should remain strong as general business
 confidence grows;
 -- After a slight rise in June and perhaps July,
 unemployment to taper off through the rest of the year,
 and for employment to grow steadily, but not
 spectacularly.
 The First Union Perspectives program also tracks the economy on an ongoing basis in Western North Carolina, Southeastern North Carolina, the Triangle and the Triad. Results are reported for each area three times per year.
 First Union National Bank of North Carolina is a principal subsidiary of Charlotte-based First Union Corporation (NYSE: FTU FTUpr) and operates 269 offices in some 200 North Carolina communities.
 -0- 7/23/92
 /CONTACT: Sandy Deem, First Union Corporation, 704-374-2710/
 (FTU) CO: First Union National Bank of North Carolina; First Union
 Corporation ST: North Carolina IN: FIN SU: ECO


JZ -- CH016 -- 2589 07/23/92 13:45 EDT
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Date:Jul 23, 1992
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