11, 2024
GDP/Gross Domestic Product is a yardstick that
FORECAST HIGHLIGHTS
• For 2024, NORTH CAROLINA real GDP is expected to increase by 3.5 percent over the 2023 level.
• Twelve of the state’s fifteen economic sectors are expected to experience output increases during 2024. The sectors with the strongest growth rates are agriculture with a real increase of 22.4 percent; mining with a real increase of 9.0 percent; retail trade with a real increase of 7.7 percent; construction with a real increase of 6.6 percent; educational and health services with a real increase of 5.4 percent; nondurable goods manufacturing with a real increase of 5.1 percent; and finance, insurance, and real estate (FIRE) with a real increase of 4.5 percent.
• For 2024, NORTH CAROLINA establishments are expected to add 68,100 net jobs during the year, an increase of 1.4 percent.
• For 2025, NORTH CAROLINA real GDP is forecast to increase by 2.3 percent over the 2024 level.
• All fifteen of the state’s economic sectors are expected to experience output increases during 2025. The sectors with the strongest growth rates are information with a real increase of 4.9 percent; construction with a real increase of 3.1 percent; mining with a real increase of 2.9 percent; hospitality and leisure services with a real increase of 2.8 percent; transportation, warehousing, and utilities (TWU) with a real increase of 2.7 percent; nondurable goods manufacturing with a real increase of 2.6 percent; and business and professional services with a real increase of 2.6 percent.
• For 2025, NORTH CAROLINA establishments are forecast to add 53,400 net jobs, an increase of 1.1 percent.
• By December of 2024, the state’s unemployment rate is expected to be 3.9 percent.
Current Dollars
2024 Highlights
Total Gross Product
Constant (2012 Dollars)
Total Gross Product
Agricultural
Mining
Construction Manufacturing
Durable Goods
Nondurable Goods TWU
Wholesale Trade
2024 GDP
Gross Domestic Product (GDP) should reach a level of $838,668.1 million in 2024. Real (inflation-adjusted) GDP is expected to increase by 3.5 percent over the 2023 level. This growth in 2024 will represent the fourth full year of growth since COVID-19.
For 2024, first quarter GDP increased by an annualized real rate of 2.9 percent. During the second quarter, GDP increased by an annualized real rate of 3.5 percent. In the third quarter, GDP is expected to increase by an annualized real rate of 2.3 percent. In the fourth quarter of 2024, GDP is expected to increase by an annualized real rate of 2.0 percent.
The sluggish growth expected during the fourth quarter of 2024 is a direct result of Hurricane Helene. In addition to the slow overall state growth expected in the fourth quarter, we have already seen a significant decline in establishment employment in October. Total North Carolina establishment employment dropped by 5,500 jobs in October compared to September. The more important question is how long will the hurricane’s impact affect the overall state economy. Clearly, Western North Carolina has been severely impacted and that has spilled over to the state economic performance.
Recovery is going to take a long time because of the nature of the damage. Unlike coastal areas, most businesses and households in the western part of the state do not have flood insurance. Normally rebuilding after a natural disaster stimulates the economy, but in this case the lack of insurance could both put a burden on small business and households and delay the rebuilding stimulus on the economy.
In addition to the hurricane impact on the state’s economy we also have uncertain FED policy going forward. After two reductions in the Federal funds rate this fall, the FED is now wavering on rate policy going forward. This uncertainty will likely have only a small impact on 2024, but could have a significant impact in early 2025, depending on future FED policy.
2024 GDP SECTOR ANALYSIS
The chart to the left presents the projected contributions of each major economic sector to North Carolina’s Gross Domestic Product (GDP). The real (inflation-adjusted) growth rate for 2024 is projected to increase 3.5 percent. Real growth rates for each sector (displayed in black type) are plotted on the horizontal axis. Percentages of GDP contributed by each sector (displayed in green type) are plotted on the vertical axis. The resulting rectangles show the weighted importance of each sector’s growth during 2024. All the sector information presented in the table to the left is based on the North American Industry Classification System (NAICS) definitions.
Twelve of the state’s fifteen economic sectors are expected to experience output increases during 2024. The sectors with the strongest growth rates are agriculture with a real increase of 22.4 percent; mining with a real increase of 9.0 percent; retail trade with a real increase of 7.7 percent; construction with a real increase of 6.6 percent; educational and health services with a real increase of 5.4 percent; nondurable goods manufacturing with a real increase of 5.1 percent; and finance, insurance, and real estate (FIRE) with a real increase of 4.5 percent.
Five other sectors are expected to experience growth rates, at levels below the overall 3.5 percent GDP real growth rate. These sectors are information with a real increase of 2.7 percent, hospitality and leisure services with a real increase of 2.5 percent, government with a real increase of 2.1 percent, business and professional services with a real increase of 1.9 percent, and wholesale trade with a real increase of 1.5 percent.
Three sectors are expected to experience a decline in output during 2024. These sectors are other services with a real decrease of 1.5 percent; transportation, warehousing, and utilities (TWU) with a real decrease of 1.0 percent; and durable goods manufacturing with a real decrease of 0.9 percent.
Quarterly Forecasted Growth Rates
Current Dollars
2025 Highlights
Total Gross Product
Constant (2012 Dollars)
Total Gross Product
TWU
Wholesale Trade Retail Trade
2025 GDP
Gross Domestic Product (GDP) should reach a level of $887,288.1 million in 2025. Real (inflation-adjusted) GDP is expected to increase by 2.3 percent over the 2024 level. This growth in 2025 will represent the fifth full year of growth since COVID-19.
For 2025, first quarter GDP is expected to increase by an annualized real rate of 2.4 percent. During the second quarter, GDP is expected to increase by an annualized real rate of 2.0 percent. In the third quarter, GDP is expected to increase by an annualized real rate of 2.5 percent. In the fourth quarter of 2025, GDP is expected to increase by an annualized real rate of 2.6 percent.
For 2025, there is one big question and several related questions. What will be the effect of the new administration? Will there be a recession or a boom? The recession question will be complicated by two issues. First, will fiscal policy by Congress and the president continue to fight the FED, and its attempt to slow inflation, and second, will the new administration be successful in implementing its supply side agenda and retain the 2017 Trump tax cuts, or will Washington bog down in partisan politics?
In addition to fiscal policy concerns, we have seen the U.S. unemployment rate rise from 3.3 percent in May of 2023 to 4.1 percent in October of 2024. As a result of the weakness in the labor market the FED has begun reducing interest rates. The expectation is that by December of 2024 the Fed Funds rate should drop by 75 to 100 basis points. During 2025, depending on economic data, the FED could continue with interest rate reductions by up to another 100 basis points by mid-year. However, if Congress does not begin to control fiscal spending, we are likely to see a return of inflation in 2025, which could disrupt the FED’s plans. The economic data over the next several months will play a pivotal role in determining FED interest rate policy and the balance between a return of inflation, a recession or a boom.
2025 GDP SECTOR ANALYSIS
The chart to the left presents the projected contributions of each major economic sector to North Carolina’s Gross Domestic Product (GDP). The real (inflation-adjusted) growth rate for 2025 is projected to increase 2.3 percent. Real growth rates for each sector (displayed in black type) are plotted on the horizontal axis. Percentages of GDP contributed by each sector (displayed in green type) are plotted on the vertical axis. The resulting rectangles show the weighted importance of each sector’s expected growth during 2025. All the sector information presented in the table to the left is based on the North American Industry Classification System (NAICS) definitions.
All fifteen of the state’s economic sectors are expected to experience output increases during 2025. The sectors with the strongest growth rates are information with a real increase of 4.9 percent; construction with a real increase of 3.1 percent; mining with a real increase of 2.9 percent; hospitality and leisure services with a real increase of 2.8 percent; transportation, warehousing, and utilities (TWU) with a real increase of 2.7 percent; nondurable goods manufacturing with a real increase of 2.6 percent; and business and professional services with a real increase of 2.6 percent.
Eight other sectors are expected to experience growth rates, at levels equal to or below the overall 2.3 percent GDP real growth rate. These sectors are wholesale trade with a real increase of 2.1 percent; educational and health services with a real increase of 2.1 percent; agriculture with a real increase of 2.1 percent; finance, insurance, and real estate (FIRE) with a real increase of 2.0 percent; durable goods manufacturing with a real increase of 2.0 percent; retail trade with a real increase of 1.9 percent; government with a real increase of 1.6 percent; and other services with a real increase of 1.3 percent.
2024 EMPLOYMENT
The sector employment analysis presented on this page is based on the North American Industrial Classification System (NAICS). North Carolina employment is expected to reach 5,033,700 persons by December 2024, a 1.4 percent increase over the December 2023 employment level. The state is expected to add 68,100 net jobs in 2024.
Ten of the state’s fourteen nonagricultural sectors of the economy are expected to experience employment increases during 2024. The sectors with the strongest projected employment increases in 2024 are education and health services at 3.7 percent and hospitality and leisure services at 2.6 percent.
2024 Employment Highlights
*Thousands of persons
2025 EMPLOYMENT
The sector employment analysis presented on this page is based on the North American Industrial Classification System (NAICS). North Carolina employment is expected to reach 5,087,100 persons by December 2025, a 1.1 percent increase over the December 2024 employment level. The state is expected to add 53,400 net jobs in 2025.
Thirteen of the state’s fourteen nonagricultural sectors of the economy are expected to experience employment increases during 2025. The sectors with the strongest projected employment increases in 2025 are information at 5.7 percent and wholesale trade at 2.8 percent.
2025 Employment Highlights
*Thousands of persons
2024-2025 NORTH CAROLINA UNEMPLOYMENT RATE
2"5";5<=>?@=AAB;)CDE>F<C *7;5<=>?@=AAB;)CDE>F<C;+?G<H=>F *7;5<=>?@=AAB;)CDE>F<C
FORECAST reports historical seasonally adjusted monthly unemployment rates for North Carolina and the United States and forecasts the seasonally adjusted monthly unemployment rate for North Carolina. The seasonal adjustment accounts for variations in labor market conditions that cause regular fluctuations in the unemployment level each month.
The graph at the top of this page provides a summary of the monthly unemployment rates for 2024 and 2025. The solid blue line represents the United States seasonally adjusted historic unemployment rate. The seasonally adjusted unemployment rate for North Carolina is represented by the solid green line. The North Carolina seasonally adjusted unemployment rate forecast is represented by the solid red line. The seasonally adjusted rates for the United States and North Carolina can be compared directly and provide more reliable estimates than the unadjusted rates.
The United States and North Carolina started 2024 with unemployment rates of 3.7 percent and 3.3 percent respectively. The U.S. unemployment rate has been increasing through the first half of 2024 and is currently at 4.1 percent. The North Carolina rate has remained below the U.S. rate during all of 2024 and now stands at 3.7 percent. However, the North Carolina rate is likely to increase over the remainder of 2024 to 3.9 percent by December and continue to rise slightly during 2025.