Asheville Metro Economic Report nd Quarter

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1 Asheville Metro Economic Report nd Quarter Johnson Price Sprinkle PA provides Asheville Metro Economic Report Second Quarter. JPS is a sixty-year-old accounting firm serving Western North Carolina with dedicated CPAs providing small-to-middle-market businesses with tax, business consulting, audit, and technology services. Highlights: The second quarter saw a continuation of long term growth in the four-county Asheville metro (Buncombe, Haywood, Henderson and Madison counties). Positive monthly yearto-year job growth has continued uninterrupted for nearly seven straight years. The metro has held the lowest unemployment rate in the state for the last twenty-eight consecutive months; two and one-third years. Permitting for new residential building totaled 780 units with a value of $154.7 million. This marks the highest quarterly permit value since the third quarter of In the second quarter of 2017 Asheville added an average of 3,500 net new jobs from a year earlier, earning an average growth rate of 1.9 percent. Positive monthly year-to-year job growth has continued uninterrupted for eighty-three straight months; one-month short of seven years. Averaging 3.4 percent over the second quarter of 2017, Asheville s unemployment rate continues to hold well below the nation and state. The metro has held the lowest unemployment rate in the state for the last twenty-eight consecutive months; two and one-third years. The Health Services sector added 1,100 jobs over the year; accounting for one-third of Asheville s employment growth, as it had in the first quarter. Positive job creation was experienced in nine of eleven major industry sectors. Two sectors experienced no change. No sector saw declines. Buncombe County Hotel/Motel Sales set a new all-time second quarter high at $93.4 million; 6.9 percent above the second quarter of However, the growth rate is 1

2 the weakest in four and one-half years; following double-digit growth in the previous eleven consecutive quarters. Existing homes sold in the second quarter totaled 909, while the average sales price equaled $344,024. The number of homes sold is 22 percent lower than one-year earlier, while over the same period the average sales price gained 18 percent. This marks the fourth consecutive quarter with the number of homes sold declining when measured year-over-year, while average prices continue to increase; likely indicating limited inventory amid strong demand. Permitting for new residential building totaled 780 units in the second quarter with a value of $154.7 million. This marks the highest quarterly permit value since the third quarter of In percentage terms, the number of units permitted is up 28.3 percent from one year earlier, the total value up 20.9 percent. Multifamily unit permits accounted for 35 percent of all residential units issued in the second quarter. Detailed Analysis: Employment In the second quarter of 2017 Asheville added an average of 3,500 net new jobs from a year earlier, earning an average growth rate of 1.9 percent (Figure 1). Positive monthly year-to-year job growth has continued uninterrupted for eighty-three straight months; onemonth short of seven years. Employment averaged 191,600 over the quarter; setting a new all-time second quarter employment total. 2

3 Figure 1 Total Employment Monthly Year-Year Percent Change 4.5% 4.0% 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 A M J Asheville North Carolina Nation Source: NC Division of Employment Security 3

4 Asheville s employment growth rate over the second quarter of 2017 places it fifth among the state s 15 metros (Figure 2). Asheville s growth rate continues above both the national and state; 1.5 and 1.4 percent respectively. Four of North Carolina s metros lost employment over the quarter; Greenville, Fayetteville, Goldsboro and Rocky Mount. Figure Q Average North Carolina Metros Employment One-Year Percent Change Charlotte Raleigh 2.8% 2.8% Wilmington Durham-Chapel Hill 2.3% 2.2% Asheville Burlington Hickory Greensboro-High Point New Bern 1.2% 1.2% 1.1% 1.9% 1.6% National Average 1.5% State Average 1.4% Jacksonville Winston-Salem 0.0% 0.5% Greenville Fayetteville Goldsboro -0.3% -0.6% -0.4% Rocky Mount -1.4% Source: NC Division of Employment Security 4

5 Averaging 3.4 percent over the second quarter of 2017, Asheville s unemployment rate continues to hold well below the nation and state; both averaging 4.2 percent over the quarter (Figure 3). The unemployment rate translates into 7,737 residents unable to find employment. Asheville s average unemployment rate for the quarter continues as the lowest among all the state s fifteen metros (Figure 4). The metro has held the lowest unemployment rate in the state for the last twenty-eight consecutive months; two and one-third years. Seven of the state s metros have quarterly unemployment rates exceeding the national average. Figure 3 Unemployment Rates (%) Percent Unemployed Nation North Carolina 3.5 Asheville 3 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 A M J Source: NC Division of Employment Security 5

6 Figure 4 Unemployment Rate (%) Q Average Asheville 3.4 Raleigh Durham-Chapel Hill Wilmington Hickory Charlotte Burlington Winston-Salem National Average 4.2% State Average 4.2% New Bern Greensboro-High Point Jacksonville Greenville Goldsboro Fayetteville 5.3 Rocky Mount 6.7 Source: NC Division of Employment Security 6

7 The Health Services sector added 1,100 jobs over the year; accounting for one-third of Asheville s employment growth, as it had in the first quarter. Positive job creation was experienced in nine of eleven major industry sectors (Figure 5). No sector saw declines. Of the nine, five reached new all-time second quarter employment highs in 2017; Health Services, Retail Trade, Leisure & Hospitality Services, Professional & Business Services and Transportation, Warehouse & Utilities. Figure 5 Asheville Metro Q Major Industry Employment One-Year Change Health Services 1,100 Professional & Business Services 800 Retail Trade 300 Manufacturing 300 Wholesale Trade 200 Construction 200 Leisure & Hospitality Services 200 Transportation,Warehouse & Utilities 100 Government 100 Information 0 Financial Activities 0 Totals rounded to nearest 100 Source: NC Division of Employment Security 7

8 Earnings Private industry average hourly earnings in Asheville equaled $22.38 in the second quarter, a slight increase of 0.9 percent from a year earlier; marking the seventh straight quarter with positive year-over-year gains (Figure 6). Asheville s second quarter hourly earnings place it seventh among all fifteen metros in the state; remaining below the statewide and national averages (Figure 7). Three of the state s metros continue to hold average hourly earnings above both the national and state averages; Raleigh, Charlotte and Durham-Chapel Hill. Figure 6 Asheville Metro Average Hourly Earnings Private Industry $25 10% $20 $20.65 $20.68 $21.03 $21.20 $21.54 $22.19 $22.24 $22.87 $22.77 $ % 8% Average Hourly Earnings $15 $10 $5 7% 6% 5% 4% 3% 2% Quarterly Year-Year Change (%) $0 0.9% -2.8% -1.4% -0.5% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Average Hourly Earnings Quarterly Year-Year Change (%) 1% 0% Source: U.S. Bureau of Labor Statistics 8

9 Figure 7 North Carolina Metros Q Average Hourly Earnings Private Industry Charlotte Durham-Chapel Hill Raleigh $27.92 $27.82 $26.83 Winston-Salem Greenville Greensboro-High Point Asheville $23.58 $23.51 $23.14 $22.38 National Average $26.21 New Bern Wilmington Hickory Burlington Rocky Mount $21.98 $21.38 $21.27 $21.04 $20.70 State Average $24.03 Fayetteville Goldsboro Jacksonville $18.00 $16.91 $18.12 Source: U.S. Bureau of Labor Statistics 9

10 Leisure & Hospitality Buncombe County Hotel/Motel Sales set a new all-time second quarter high at $93.4 million; 6.9 percent above the second quarter of 2016 (Figure 8). However, the growth rate is the weakest in four and one-half years; following double-digit growth in the previous eleven consecutive quarters. Figure 8 Buncombe County Hotel/Motel Sales $120 M 30% Hotel/Motel Sales $100 M $80 M $60 M $40 M $41 M $76 M $86 M $86 M $52 M $87 M $100 M $101 M $57 M $93 M 25% 20% 15% 10% Quarterly Year-Year Change (%) $20 M 6.9% 5% $ M 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Hotel/Motel Sales Quarterly Year-Year Change (%) 0% Source: Buncombe County Tourism Development Authority 10

11 Average Hotel Room Rates in Buncombe County rose by 2.5 percent from one year earlier, closely matching the pace in the first quarter (Figure 9). The room rate averaged $150 in the second quarter. Figure 9 Buncombe County Average Hotel Room Rate $180 $169 12% $160 $140 $136 $146 $157 $143 $155 $150 10% Average Room Rate $120 $100 $80 $60 $40 $20 $106 $113 $ % 8% 6% 4% 2% Quarterly Year-Year Change (%) $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q % Average Room Rate ($) Quarterly Year to Year Change (%) Source: Smith Travel Research, Buncombe County Tourism Development Authority 11

12 Total Passenger Traffic at the Asheville Regional Airport equaled 241,105 in the second quarter of 2017; up 13.8 percent from a year earlier (Figure 10). This marks the third consecutive quarter with double-digit passenger increases. Figure 10 Asheville Regional Airport Total Passengers 300,000 25% Total Passengers 250, , , ,000 50, K 212K 230K 195K 140K 212K 250K 225K 166K 241K 13.8% 20% 15% 10% 5% Quarterly Year-Year Change (%) 0-50, , ,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Airport Passengers Quarterly Year to Year Change (%) -7.3% Source: Asheville Regional Airport 0% -5% -10% 12

13 Housing Existing homes sold in the second quarter totaled 909, while the average sales price equaled $344,024 (Figure 11). The number of homes sold is 22 percent lower than oneyear earlier, while over the same period the average sales price gained 18 percent (Figure 12). This marks the fourth consecutive quarter with the number of homes sold declining when measured year-over-year, while average prices continue to increase; likely indicating limited inventory amid strong demand. Figure 11 Asheville Area Existing Home Sales $400,000 1,600 Average Sales Price $350,000 $300,000 $250,000 $200,000 $150, ,115 1,279 1, ,449 1,186 1,034 1,137 $344, ,400 1,200 1, Number of Home Sold $100, $50, $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Homes Sold Average Sales Price Source: NC REALTORS 0 13

14 Figure 12 Asheville Area Existing Home Sales Trends Quarterly Year-Year Change (%) 35% 30% 30% 31% 30% 25% 15% 15% 17% 11% 15% 15% 18% 5% 2% -1% 5% 2% 5% 7% -5% -7% -15% -17% -15% -22% -25% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Homes Sold Average Sales Price Source: NC REALTORS 14

15 At 8.5 percent, Asheville s Same-Home Annual Appreciation Rate in the third quarter ranks fourth among all the state s metros and holds above both the state and national rates (Figure 13). This marks the seventeenth consecutive quarter of positive Same- Home Appreciation Rates in Asheville. The Goldsboro metro experienced home price depreciation in the quarter, down 3.3 percent. Figure 13 Housing Price Index North Carolina Metros Same-Home Annual Appreciation Rate (%) Q Charlotte 10.1% Raleigh Durham-Chapel Hill Asheville Wilmington Greenville 6.5% 9.0% 8.6% 8.5% 8.3% 7.1% State Average New Bern Winston-Salem Hickory Rocky Mount Greensboro-High Point Burlington 5.0% 4.5% 3.8% 3.3% 3.2% 2.8% 6.4% National Average Fayetteville Jacksonville 1.4% 0.7% Goldsboro -3.3% Source: Federal Housing Finance Agency 15

16 Permitting for new residential building totaled 780 units in the second quarter with a value of $154.7 million (Figure 14). This marks the highest quarterly permit value since the third quarter of In percentage terms, the number of units permitted is up 28.3 percent from one year earlier, the total value up 20.9 percent. Multifamily unit permits accounted for 35 percent of all residential units issued in the second quarter. Figure 14 Asheville Metro Residential Building Permits Total Units $180 M $160 M $140 M $120 M $100 M $80 M $60 M $40 M $20 M Total Value 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q $ M Single Family Units Multi Family Units Total Value Source: U.S. Census Bureau 16

17 Retail Sales Taxable retail sales collections in Asheville totaled $1,842,488,120 ($1.8 billion) in the second quarter; 5.5 percent above collections for the same period one-year earlier (Figure 15). The total sets a new all-time second quarter record for retail sales in the metro. Retail sales have experienced positive year-over-year growth over the last fourteen consecutive quarters; averaging an annual increase of 9.6 percent or $138.8 million. Figure 15 Asheville Metro Taxable Retail Sales Taxable Retail Sales ($) $2,000 M $1,800 M $1,600 M $1,400 M $1,200 M $1,000 M $800 M $600 M $400 M $1,321 M $1,618 M $1,672 M $1,737 M $1,913 M $1,746 M $1,785 M $1,842 M $1,626 M $1,466 M 5.5% 16% 14% 12% 10% 8% 6% 4% Quarterly Year-Year Change (%) $200 M 2% $ M 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q , % Taxable Retail Sales ($) Quarterly Year-Year Change (%) Includes collections of penalties, interest, and sales & use tax; and may reflect activity from prior periods. Source: NC Department of Revenue 17

18 Contact JPS. Let us help you and your business grow in the direction you desire. Asheville Boone Marion About JPS: Johnson Price Sprinkle PA accounting firm is about Being Greater. At JPS, our CPAs believe providing technical expertise, engaged relationships and positive initiative position clients for long-term financial success. A sixty-year-old CPA firm, JPS invests time and resources into our communities to keep WNC Being Greater. With offices in Asheville, Boone and Marion, NC, we provide innovative tax, assurance, business consulting and technology services for small-to-middle-market businesses. At JPS, we strive to fulfill our mission: To Be Greater by positively impacting our Clients, People, Community and Profession. 18