Asheville Metro Economic Report – 2016 Second Quarter
Johnson Price Sprinkle PA (JPS) presents Asheville Metro Economic Report 2016 Second Quarter. JPS is a CPA firm specializing in business tax, assurance and business advisory needs for small to mid-sized, closely-held businesses with offices in Asheville, Boone and Marion, NC.
Highlights:
Employment growth continues in the four-county Asheville metro (Buncombe, Haywood, Henderson and Madison counties). Monthly year-to-year job growth has continued uninterrupted for six straight years. The unemployment rate remains lowest among all metros in the state. Existing home sales set a new all-time record, as did Buncombe County Hotel/Motel Sales.
• Asheville metro continued to add jobs through the second quarter of 2016, although at a slower pace than the previous year and a half. The metro area is up 2,900 more jobs than one-year earlier, earning an average growth rate of 1.6 percent.
• Despite the slowdown in the growth rate, positive monthly year-to-year job growth has continued uninterrupted for six straight years.
• Averaging 3.9 percent, Asheville metro’s average unemployment rate for the quarter is lowest among all of the state’s fifteen metros. The metro has held the lowest unemployment rate in the state for twenty-five of the last twenty-seven months.
• Second quarter job creation was concentrated in four major industry sectors. Similar to the first quarter, the Professional & Business Services sector had the strongest gains. Uncharacteristically, employment was down slightly in the Leisure & Hospitality Services sector, the first decline since early 2011.
• Private industry average weekly earnings increased 6.5 percent from a year earlier. The gain is the strongest in the last seven quarters.
• Buncombe County Hotel/Motel Sales set a new all-time quarter high of $87 million, registering a 15.2 percent gain over the second quarter of 2015.
• Existing homes sold in the second quarter totaled 1,449, while the average sales price equaled $291,758. This represents the highest number of existing homes sold in any quarter on record in the Asheville metro area.
• Permitting for new residential building totaled 608 units in the second quarter with a value of $128 million. In percentage terms, the number of units permitted is three percent lower than one year earlier and the value is 9.2 percent higher. The quarterly value is the highest since the third quarter of 2007.
Detailed Analysis:
Employment
Asheville metro continued to add jobs through the second quarter of 2016, although at a slower pace than the previous year and a half (Figure 1). The metro area is up 2,900 more jobs than one-year earlier, earning an average growth rate of 1.6 percent. The quarterly pace is the lowest since the third quarter of 2014. Despite the slowdown, monthly year-to-year job growth has continued uninterrupted for six straight years. Total employment averaged 185,800 over the quarter; the highest second quarter total on record.
Figure 1
Total Employment
Monthly Year-Year
Percent Change
Source: NC Division of Employment Security
Asheville’s employment growth rate over the second quarter of 2016 places it fourth among the state’s 15 metros (Figure 2). The rate is below the national and statewide pace of growth. Two of North Carolina’s metros lost employment over the quarter; Greenville and Rocky Mount.
Figure 2
2016 2Q Average
North Carolina Metros Employment
One-Year Percent Change
Source: NC Division of Employment Security
Averaging 3.9 percent over the second quarter of 2016, Asheville metro area’s unemployment rate holds well below both the state and nation (Figure 3). The unemployment rate translates into 8,765 residents unable to find employment.
Asheville metro’s average unemployment rate for the quarter is lowest among all of the state’s fifteen metros (Figure 4). The metro has held the lowest unemployment rate in the state for twenty-five of the last twenty-seven months. Currently seven of the state’s metros have quarterly unemployment rates exceeding the national average.
Figure 3
Unemployment Rates (%)
Source: NC Division of Employment Security
Figure 4
Unemployment Rate (%)
2016 2Q Average
Source: NC Division of Employment Security
Second quarter job creation was concentrated in four major industry sectors (Figure 5). The top three gainers each broke all-time second quarter employment totals. Similar to the first quarter, the Professional & Business Services sector had the strongest gains; up 1,100 jobs with an annual growth rate of 5.5 percent. Uncharacteristically, the Leisure & Hospitality Services sector lost employment, albeit only 100 workers, but the first decline since early 2011.
Figure 5
Asheville Metro – 2016 2Q
Major Industry Employment
One-Year Change
Source: NC Division of Employment Security
Earnings
Private industry average weekly earnings in Asheville metro area equaled $744 in the second quarter, an increase of 6.5 percent from a year earlier (Figure 6). The percentage gain is the strongest in the last seven quarters.
Asheville metro’s second quarter weekly earnings place it eighth among all fifteen metros in the state; below both the statewide and national averages (Figure 7). Three of the state’s metros have weekly earnings above the national average; Durham-Chapel Hill, Charlotte and Raleigh.
Figure 6
Asheville Metro
Average Weekly Earnings
Private Industry
Source: U.S. Bureau of Labor Statistics
Figure 7
North Carolina Metros – 2016 2Q
Average Weekly Earnings
Private Industry
Source: U.S. Bureau of Labor Statistics
Leisure & Hospitality
As noted earlier, the Leisure & Hospitality sector experienced its first employment decline since 2011. The drop of just 100 workers still leaves the sector as one of the largest in the metro, employing about 27,000.
Buncombe County Hotel/Motel Sales set a new all-time quarter high of $87 million, registering a 15.2 percent gain over the second quarter of 2015 (Figure 8). Hotel/Motel Sales have experienced double-digit percentage growth for the last eight consecutive quarters.
Figure 8
Buncombe County
Hotel/Motel Sales
Source: Buncombe County Tourism Development Authority
Average Hotel Room Rates in Buncombe County rose by 5.7 percent from one year earlier (Figure 9). The room rate averaged $143; setting a new all-time second quarter high in the county.
Figure 9
Buncombe County
Average Hotel Room Rate
Source: Smith Travel Research, Buncombe County Tourism Development Authority
Total Passenger Traffic at the Asheville Regional Airport equaled 211,956 in the second quarter of 2016, closely matching the 211,972 passengers in the second quarter of 2015; representing a 0.0 percent change over the year (Figure 10).
Figure 10
Asheville Regional Airport
Total Passengers
Source: Asheville Regional Airport
Housing
Existing homes sold in the second quarter totaled 1,449, while the average sales price equaled $291,758 (Figure 11). This represents the highest number of existing homes sold in any quarter on record in the Asheville area. Sales are 30 percent higher than one-year earlier, while the average sales price is up by seven percent (Figure 12). Sales have been increasing at an average annual rate of 30 percent for the last three consecutive quarters.
Figure 11
Asheville Area
Existing Home Sales
Source: NC REALTORS
Figure 12
Asheville Area
Existing Home Sales Trends
Quarterly Year-Year Change (%)
Source: NC REALTORS
At 6.0 percent, Asheville metro’s Same-Home Annual Appreciation Rate in the second quarter is third among all of the state’s metros and above both the state and national rate (Figure 13). This marks the thirteenth consecutive quarter of positive same-home appreciation rates in the Asheville metropolitan area.
Figure 13
Housing Price Index
North Carolina Metros
Same-Home Annual Appreciation Rate (%)
2016 2Q
Source: Federal Housing Finance Agency
Permitting for new residential building totaled 608 units in the second quarter with a value of $128 million (Figure 14). In percentage terms, the number of units permitted is three percent lower than one year earlier and the value is 9.2 percent higher. The quarterly value is the highest since the third quarter of 2007. Multifamily unit permitting continued strong, accounting for 24 percent of all residential units issued in the second quarter.
Figure 14
Asheville Metro
Residential Building Permits
Source: U.S. Census Bureau
Retail Sales
Taxable retail sales collections in Asheville metro area totaled $1,745,844,232 for the second quarter; 7.9 percent above collections for the same period one-year earlier (Figure 15). Retail sales have experienced positive year-over-year growth over the last ten consecutive quarters; averaging an annual increase of ten percent.
Figure 15
Asheville Metro
Taxable Retail Sales
Includes collections of penalties, interest, and sales & use tax; and may reflect activity from prior periods.
Source: NC Department of Revenue
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