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TRIAD EMPLOYMENT REACHES RECORD HIGH

 WINSTON-SALEM, N.C., May 12 /PRNewswire/ -- Employment in the Triad is at a record high, while unemployment continues to fall. Retail sales continued to grow early this year after a strong 1992, and vehicle sales jumped almost 18 percent in the first quarter. New-home construction continued the pace in early 1993 after jumping almost 19 percent last year.
 These results -- and an economic forecast for 1993 -- were highlighted today at the Triad Perspectives economic briefing by Mike Crocker, Winston-Salem regional executive for First Union National Bank of North Carolina.
 "The Triad is at its highest level of employment ever," Crocker said. "We are 2.5 percent above our pre-recession peak, and we haven't even started to count in the jobs that will result from a good series of economic development announcements in the past four to six months ... In addition to a good, growing workforce, we also have available buildings, infrastructure and land, for a strong economic future."
 Crocker was joined at the briefing by David Orr, First Union's chief economist, who reported on the state and national economies. Orr said North Carolina continues to have stronger job growth than the nation and predicted job growth of 2-2.5 percent in the state this year versus 1.5 percent in the nation. Personal income in North Carolina was up 7.0 percent in the fourth quarter (the latest figures available) versus 5.2 percent in the nation.
 Orr noted that single-family home permits in the state were up 26.5 percent last year to 42,635 and were only 2.2 percent shy of the record set in 1986. "Expect 1993 homebuilding in North Carolina to be up 5 percent from 1992, but even if only flat with 1992, it will be a very high level of activity," Orr said. Home buyers should continue to see low interest rates, he added.
 "Longer-term interest rates, including mortgage rates, may rise by 1/4 to 1/2 point in the next few months as investor perceptions change due to better economic data," he said. "But the general trend over the next several years still looks like even lower rates, with mortgages below 7 percent."
 Overall, the national economy should continue to improve, Orr said.
 "The U.S. economy is nearing the bottom of another mini-cycle, the third slow-down since the recession ended in the spring of 1991," he said. "We should not confuse the peaks and troughs of these mini-cycles with either a `real' recovery or a `new' recession. Rather, look at the trend as slowly, erratically, struggling, but clearly up."
 In the Triad, first quarter employment averaged 512,333, a 3.5 percent gain over last year. The figure includes 3,900 more manufacturing jobs, as well as growth in medical, retail, financial and temporary hiring. March unemployment in the Triad fell to 4.5 percent from 5.5 percent a year earlier, representing 4,800 fewer people looking for work.
 Retail sales were up 8.3 percent last year in Forsyth County and were 5.8 percent higher in Guilford County. "The state has reported sales activity only through January, but just when national analysts said sales would drop after Christmas, we posted a 5.5 percent January increase in Forsyth and a 9.3 percent gain in Guilford," Crocker said. "Most of our retail contacts says sales continue fairly steady, with perhaps a pick-up in the past few weeks."
 Retail sales were boosted by an estimated $30 million in the first quarter by vehicle sales. First-quarter sales of new cars and light trucks, including minivans, grew 8.7 percent to 3,310 in Forsyth and jumped 23.5 percent in Guilford to 5,631.
 The number of new homes built in Forsyth increased 26.5 percent last year to 1,473, while Guilford posted a 13.8 percent gain to 2,311. Forsyth continued the trend with an 18.9 percent gain in January and February, but activity dropped 12.5 percent for those months in Guilford, dampened by poor weather.
 "When we get the numbers for another month or two, those statistics will improve," Crocker said. "Here, most builders are running as hard as they can. While we continue to have a good inventory of existing homes for sale, new-home builders' biggest problem is keeping enough new inventory to meet demand."
 As low interest rates make home-buying more affordable, multifamily construction continues to be slow. Forsyth permitted only 12 units in the 14 months ending in February 1993. Guilford permitted 325 units last year -- a healthy increase over 1990 and 1991, but only half the level permitted in 1989. Through February of this year, Guilford had permitted only four units. However, apartment occupancy levels are estimated to be in the mid-90 percent range, and 500 units are expected to be permitted in the two counties this year.
 "If we do build those 500 units, it will look like an apartment boom, compared with recent years," Crocker said. "But remember that back in '85 and '86, we were building 3,500-4,300 units a year. We'll probably never see that again, and I'd be pleased with a 500-600 unit year."
 Commercial construction in Forsyth County totaled $73.2 million in the 14 months ending in February 1993, compared to $89.4 million in the previous 14-month period. Guilford's total through the 14 months ending in February was $123.7 million, versus $159.2 million in the same period a year ago. "If you look at the developing of permitting here in the months since February, however, you can see strength building," Crocker said, citing major medical, retail and other projects.
 Here is the First Union Perspectives forecast for 1993 and into 1994:
 Homebuilding will surpass 1992 by a healthy margin, probably reaching 4,200-4,300 new homes -- about the same level as 1988. An estimated 500-600 multifamily units will be built this year, with little effect on apartment occupancy rates.
 Commercial construction will take off in the next couple of months. The renovation and expansion of existing manufacturing corporations will be less visible but equally important.
 Car sales will show even larger gains through summer, perhaps dropping a bit late in the third quarter. Increases for the year should be around 18 percent.
 Retail sales increases may not be so large as late-spring numbers come in, but will strengthen again in late summer and early fall. Fourth quarter, going against a strong holiday season last year, will be solid but not spectacular. At year's end, sales gains for the Triad should total 6-9 percent.
 Most important, unemployment will drop even more this year, and Triad total employment will show some of the strongest growth in the state this year, and through 1994.
 First Union tracks the economy on an ongoing basis in the Triad, the Triangle, Charlotte, Southeast N.C. and Western N.C. Results are reported 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 more than 200 North Carolina Communities.
 At March 31, 1993, First Union Corporation reported assets of $63.2 billion, and operated 1,238 banking offices in Florida, North Carolina, South Carolina, Georgia, Virginia, Tennessee, Maryland, and Washington, D.C., and 238 nonbanking offices in 36 states and the District of Columbia. Including pending acquisitions expected to be completed in the second quarter of 1993, the corporation is expected to operate approximately 1,300 banking offices and have assets of approximately $71 billion, which would make it the nation's eighth largest bank holding company.
 -0- 5/12/93
 /CONTACT: (Media) Sandy Deem of First Union Corporation, 704-374-2710/
 (FTU)


CO: First Union Corporation ST: North Carolina IN: FIN SU: ECO

MM -- CH006 -- 7606 05/12/93 13:01 EDT
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