V. Business Indicators
This section of the North Carolina Economic Survey 1999 examines and
forecasts various indicators of national economic performance. The first
two articles predict housing starts and real estate lending. The third
article examines outstanding credit debt. The final article focuses on
the impact of the recession in Japan on the U.S.
Myers and Smith predict a 3 percent annual increase in housing starts
for both 1999 and 2000. Their forecast is based on lagged long-term interest
rates and real consumption spending.
McClure and Crawford forecast real estate lending, expressed in real
terms, to increase 4.3 percent in 1999 and 4.4 percent in 2000. They use
a model based on past interest rates and consumer price indices.
Carswell and Shadrick predict a 7.1 percent increase in real consumer
outstanding credit debt for 1999 and a 9.5 percent increase for 2000. This
forecast is consistent with historic low savings rates throughout the 1990s,
as well as forecast low or negative saving presented in Section III.
Finley predicts U.S. real GDP will increase 8.4 percent in 1999 and
3.7 percent in 2000, while Japanese GDP will decrease 3.5 percent in 1999
as the present recession deepens, but grow 4.2 percent as Japan begins
to recover in 2000. Finley also forecasts exchange rates. His finding that
the exchange rate will rise from 130 yen-per-dollar in 1999 to 140 yen-per-dollar
in 2000, shows the impact of the recession on the foreign exchange market.
His forecast yen depreciation will assist in Japan's recovery as it encourages
foreigners and Americans to buy newly-cheaper Japanese goods.
Generally, the forecast business indicators presented in this section
point to continued prosperity. Even the increase in consumer debt is symptomatic
of consumer optimism. The prediction of an end to the recession in Japan
is especially promising.