Niswander: Economy will be good in 2019
By Ginger Livingston
The Daily Reflector
Friday, January 11, 2019
The economy will be fine in 2019, said the long-time finance administrator for ECU, so people should take a deep breath and tune out the rhetoric from Raleigh and Washington.
“It’s going to be OK. In the nation, North Carolina and ( locally) the economy is going to be fine in 2019,” said Frederick “Rick” Niswander, East Carolina University professor of Accounting and former vice chancellor for administration and finance.
Niswander delivered his outlook on the coming year’s economy to an audience of more than 200 at the annual Greenville-Pitt County Chamber of Commerce Economic Forecast Luncheon held on Thursday at the Holiday Inn.
“Growth is slowing but it’s still positive, unemployment is very good,” he said. “GDP (gross domestic product) is very good. 2019 is not going to be a problem from an economic perspective, absent an out of the blue shock.”.
However, Niswander would not extend his forecast through 2020 because he said there will be a recession sometime in the next several years.
People should save money to prepare for an economic downturn, he said.
“We need to be saving money anyway but in recessions the economy slows, some people lose their jobs and you need a cushion,” Niswander said. “You need to be able to sleep well at night so you should save money. That said, given that consumer spending is 70 percent of the GDP if everybody cuts back (and starts) saving, manufacturing cuts back.”
The Greenville-Pitt County economy will “chug along” in 2019, he said.
Niswander, who has delivered the chamber’s economic forecast for 10 consecutive years, presented multiple slides showing the economic slump that has seized most of eastern North Carolina, making Greenville-Pitt County a bright light, but one that does not shine nearly as bright as Raleigh or Charlotte, he said. Debates on health care and state support of education will be important.
The community’s biggest challenge will be a somewhat flat employment outlook, Nisewander said, because jobs are not being produced.
Greenville’s November unemployment rate was 3.7 percent, but Niswander sees the 2019 year-end rate hovering about 4 percent to 4.4 percent.
Nationally and statewide, the economy will grow in 2019. The unemployment rate is low as it can go, he said, and North Carolina’s rate will remain higher than the national rate.
The biggest risk in 2019 is slowing growth internationally, particularly in China and the European Union.
Niswander reviewed what he called the “distress index,” which measures the vitality of communities. It shows the nation’s economic growth has not reached all areas, especially in the South nationally and in eastern North Carolina locally.
More than 37 percent of the nation’s population lives in the South compared to 23.5 percent in the West. However, 52 percent of distressed zip codes are in the South compared to 16 percent in the West.
In North Carolina, nearly 25 percent of the state’s population lives in a distressed zip code compared to 15 percent in the United States. Most of those zip codes are in eastern North Carolina.
Nearly 20 percent of the state’s population lives in a prosperous zip code compared to 26.5 percent nationwide.
When January ends, the United States will have experienced 115 months of economic expansion and Niswander believes the nation is on track to tie the record for the third longest period of expansion, which was 120 months between 1991 and 2001.
Americans should worry about debt, personally, nationally and worldwide, Niswander said.
The United States added $1.2 trillion to the federal debt in fiscal year 2018, raising the amount to $21.52 trillion.
Worldwide debt, a combination of personal, governmental and corporate debts, is at $260 trillion, 3 ½ times the world gross domestic product, he said.
“We are mortgaging our kids’ future and their kids’ future,” Niswander said.
“Tax cuts are just a tax increase waiting to happen,” he said. “We’ve got to start as a nation and as a world to get a handle on this debt before it all comes tumbling down.”
Neither the United States’ or world’s economy is growing fast enough to repay the debt, and both are looking at a debt reset because they be able to repay it.
“This is one of the biggest long-term problems we have and it isn’t getting any better,” he said.
However, the leaders in the position to make changes lack the will to do so, Niswander said.
Contact Ginger Livingston at email@example.com or 252-329-9570.