Asheville Metro Economic Report 2014 First Quarter

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Lester McCoy
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1 Asheville Metro Economic Report Johnson Price Sprinkle PA

2 HIGHLIGHTS: ASHEVILLE METRO Employment gains slowed in the first quarter of 2014 dropping behind five other N.C. Metros and lagging behind both the state and the nation. Total numbers of persons employed in Leisure & Hospitality, and Retail industry sectors contracted or experienced no growth for the first time in more than a year. Gains made in the Health Services & Private Education sector as well as significant gains in Professional and Business Services tempered contractions in other sectors to maintain net new job expansion for the metro. Hotel/Motel Sales maintained steady improvement increasing $2.1 million or 7 percent over the year. A total of 652 homes were sold in the quarter, decreasing year-over-year for the first time since the second quarter of 2011 but adding 7.4 percent to the average sale price of existing homes over one year prior. The Asheville metro area gained 1,900 more jobs than one year earlier, averaging a growth rate of 1.2 percent, continuing net positive year-over-year job growth for more than three consecutive years. Averaging 5.3 percent, Asheville s unemployment rate remains among the top three metros in N.C. well below the state and national average, and improving 2.3 percent over the same period last year. Employment gains were led largely by the Professional and Business Services sector; up 1,600 net new jobs, buoying modest contractions across five industry sectors in the metro. Total Hotel/Motel Sales in the county topped $33 million for the first quarter of 2014, a record high over the same quarter for the past five years. Total Passenger Traffic at the Asheville Regional Airport continued positive growth, up 13.7 percent, or 16,425 more passengers from a year earlier; marking the fourth consecutive year-over-year quarterly increase. For the first time in two and a half years, the number of existing homes sold in the first quarter was down 3.6 percent over the year; however average home prices experienced a 7.4 percent gain, averaging $257,455 for the quarter. At 3.8 percent, the same-home annual appreciation rate places Asheville second among the state s 14 metros. Asheville continues to outpace the statewide appreciation rate by 2.7 percent. Permitting for new residential units in Asheville continued positive growth in the first quarter with 291 units permitted, up 5.4 percent from a year earlier. The total value of residential permits equaled $66.8 million, up over the year by 15.2 percent. 1

3 DETAILED ASHEVILLE METRO ANALYSIS EMPLOYMENT Asheville continued to add jobs throughout the first quarter of 2014 at a modest pace dropping below the state for the first time since September 2012 (Figure 1). The metro area is up 1,900 more jobs than one-year earlier, averaging a growth rate of 1.2 percent for a total average employment of 174,700 jobs for the quarter. 4.0% Figure 1 Total Employment Monthly Year-Year Percent Change 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% J F M A M J J A S O N D J F M A M J J A S O N D J F M Asheville MSA North Carolina United States Source: NC Employment Security Commission 2

4 Asheville dropped back to the sixth fastest growing metro in the state in the first quarter, with Raleigh-Cary, Wilmington, Charlotte, Fayetteville, and Hickory outpacing the Asheville MSA (Figure 2). Rocky Mount was joined by Jacksonville and Greenville as the only N.C. metros experiencing negative job growth rates. Figure Q Average North Carolina Metros Employment One-Year Percent Change Raleigh-Cary 4.9% Wilmington 3.9% Charlotte 2.7% Fayetteville Hickory Greensboro-High Point Asheville Goldsboro Burlington Winston-Salem Durham-Chapel Hill 1.7% 1.6% 1.2% 1.2% 1.0% 0.7% 0.6% 0.1% Greenville Jacksonville Rocky Mount -4.9% -0.4% -0.1% National Average 1.9% State Average 1.3% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Source: NC Employment Security Commission Averaging 5.3 percent for the second consecutive quarter, Asheville s unemployment rate remains well below the state and nation and continues a gradual declining trend; two and a half percentage points below the same period last year (Figure 3). Asheville s average unemployment rate for the quarter shares the second lowest rate among all of the state s 14 metros, just 0.2 percent higher than Durham-Chapel Hill (Figure 4). 3

5 Figure 3 Unemployment Rates (%) United States North Carolina 5.5 Asheville 4.5 J F M A M J J A S O N D J F M A M J J A S O N D J F M Source: NC Employment Security Commission Figure 4 Unemployment Rate (%) Q Average Durham-Chapel Hill Asheville Raleigh-Cary National Average 6.7% State Average 6.9% Winston-Salem 6.2 Burlington Greenville Charlotte Goldsboro Jacksonville 6.8 Greensboro-High Point Wilmington Hickory Fayetteville 7.6 Rocky Mount Source: NC Employment Security Commission 4

6 Diverging from the four previous quarters, the Leisure & Hospitality industry sector experienced no employment gains in the first quarter while Retail Trade shed 600 jobs. These losses in previous job growth leaders for Asheville were tempered by Professional and Business Services and Health Services and Private Education, which combined, added 2,500 net new jobs (Figure 5). Figure 5 Asheville Metro Q Major Industry Employment One-Year Change Professional & Business Services 1,600 Health Services & Private Education 900 Manufacturing 300 Wholesale Trade 100 Leisure & Hospitality Services 0 Financial Activities 0 Transportation,Warehouse & Utilities (100) Information (100) Construction (100) Government (100) Retail Trade (600) (1,000) (500) ,000 1,500 2,000 Source: NC Employment Security Commission 5

7 LEISURE & HOSPITALITY As noted earlier, total employment in the Leisure and Hospitality sector stagnated in the first quarter of 2014 adding zero net new jobs. Buncombe County Hotel/Motel Sales increased, however, by $2.1 million or 6.8 percent over the year (Figure 6). Figure 6 Buncombe County Hotel/Motel Sales Quarterly Year-Year Change ($) $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Source: Buncombe County Tourism Development Authority 6

8 Total Hotel/Motel Sales in the county surpassed $33 million for the quarter. Average Hotel Room Rates in Buncombe County rose by 5.7 percent from one year earlier (Figure 7). The room rate averaged $ over the quarter. 7% Figure 7 Buncombe County Average Hotel Room Rate Quarterly Year-Year Change (%) 6% 5.9% 5.7% 6.2% 5.7% 5% 4.7% 5.1% 5.0% 4% 4.1% 3.8% 3% 2% 1% 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Source: Smith Travel Research, Buncombe County Tourism Development Authority 7

9 Total Passenger Traffic at the Asheville Regional Airport continued its growth for the fourth consecutive quarter, up 13.7 percent, or 16,425 more passengers from a year earlier (Figure 8). 25% Figure 8 Asheville Regional Airport Total Passengers Quarterly Year-Year Change (%) 20% 17.9% 15% 14.1% 13.7% 10% 9.0% 5% 5.0% 0% -5% -10% -15% -12.2% -12.2% -20% -25% -17.2% -20.0% -20% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Source: Asheville Regional Airport 8

10 HOUSING The number of existing homes sold in the first quarter declined from one year earlier for the first time in over two years, dropping 3.6 percent to 652 home sales. Average home sales prices, however, increased 7.4 percent to $257,445 suggesting a stabilizing market and strengthening home values (Figure 9). 30% Figure 9 Asheville Area Existing Home Sales Quarterly Year-Year Change (%) 28% 29% 27% 25% 20% 27% 21% 19% 15% 16% 15% 17% 10% 9% 7% 5% 0% -5% 4% 2% -2% -3% 2% 3% -4% -10% -15% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Homes Sold Average Sales Price Source: NC Realtors 9

11 The most recent available Housing Price Index data shows the same-home annual appreciation rate at 3.8 percent, placing Asheville second among the state s 14 metros (Figure 10). Asheville continues to outpace the statewide appreciation rate by 2.7 percent. Thirteen of North Carolina s metros lag the national same-home appreciation rate of 4.8 percent. Figure 10 North Carolina Metros Same-Home Annual Appreciation Rate (%) Charlotte 4.8% Asheville Goldsboro 3.4% 3.8% Raleigh-Cary 3.0% Durham-Chapel Hill Wilmington Jacksonville 1.0% 1.2% 1.5% Greensboro-High Point Hickory Greenville -0.9% -0.6% -0.6% Rocky Mount Winston-Salem -2.3% -2.0% Burlington Fayetteville -3.5% -3.5% Source: Federal Housing Finance Agency 10

12 Permitting for new residential units in Asheville continued positive growth in the first quarter with 291 units permitted, up 5.4 percent from a year earlier (Figure 11). There were no multi-unit permits issued during the first quarter of The total value of residential permits equaled $66.8 million for the quarter, up over the year by $8.8 million, or 15.2 percent. 450 Figure 11 Asheville Metro Residential Building Permits $100, $90, $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 Total Value 50 $10, Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Single Family Units Multi Family Units Total Value ($1,000's) Source: U.S. Census Bureau $0 11

13 RETAIL SALES Totaling just over $1 billion, combined total retail sales in the first two months of 2014 appear to be strengthening after contracting 5 percent year-over-year in January culminating in a 1 percent increase over the same period last year. Unlike October 2013, the January slump appears to coincide with the statewide retail sales data for the same period year-over-year and may be reflective of impacts of inclement weather events throughout the month of January on retail activity (Figure 12). 10% Figure 12 Asheville Metro Retail Sales* Trailing Twelve Month Year-Year Percent Change 9% 5% 2% 6% 4% 3% 3% 5% 4% 6% 5% 5% 0% 10% 6% 4% 3% 5% 7% 3% -13% 4% 9% -5% 6% -5% -7% -10% -15% Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Asheville Metro North Carolina *Includes collections of penalties, interest, and sales and use tax; and may reflect activity from prior periods. Source: NC Department of Revenue 12

14 For all the most current JPS Alerts & Reports, scan here with your mobile device. Asheville - Headquarters 79 Woodfin Place, Suite 300 Asheville, NC Boone Office 1013 State Farm Road Boone, NC Marion Office 500 North Main Street Suite 16 Marion, NC

Center for Business and Economic Research Dixon Hughes Goodman Triad Business (October 2014)

Center for Business and Economic Research Dixon Hughes Goodman Triad Business (October 2014) The is developed and maintained by: Dr. G. Donald Jud, Center for Bus. & Eco. Res., Bryan School of Bus. & Eco.,