That thud you hear isn't recession ... yet

How's the state economy? The story in numbers

That dastardly "R" word -- recession -- is slipping into talk about money and markets. Blame it on the housing slump, mortgage mess and credit crunch that have roiled Wall Street. Some economists say it's enough to sink consumers' spirits, crimp business investment and stall growth. Others see a speed bump, not a recession, which usually is defined as consecutive quarters of declining gross domestic product.

No matter the view, there's little doubt that the economy has slowed. A report Tuesday showed that manufacturers trimmed orders for components in August, suggesting that they expect weaker sales in the coming months.

The state of manufacturing illuminates the realities here: Despite its economic shifts, North Carolina remains largely rooted in manufacturing. About a fifth, or 20 percent, of the state's gross domestic product comes from the manufacturing sector, compared with about 12 percent for the nation.

If recession hits, this state will likely feel it more than others. In recent research, N.C. State University economist Mike Walden found that the state's economy is slower in times of trouble, in large part because of the factory base.

Walden is not predicting a recession, and if one happens, North Carolina would fare better in the recovery, his research shows.

So what is the state of the state?

It is "better than the significant majority of states we operate in," said Stephen P. Zelnak Jr., CEO of Martin Marietta Materials. The Raleigh company sells gravel and other construction aggregates and operates in 30 states. "At the same time, it's coming off peak levels.

"We're not immune from the nations' difficulties," he said.

Here is what the data show:

Job growth has been sluggish, and July was tough

Total employment grew at the slowest annual pace in almost four years, according to the most recent data from the N.C. Employment Security Commission.

Between July 2006 and July 2007, the total number of people reporting jobs grew by 45,323.

But in July, the total number of people employed in the state dropped by 12,284 -- the biggest monthly drop in four years.

The figures give more insight into the job market, which usually is measured by the unemployment rate. That rate shows 95 percent of those who want work in the state have it. But the slowdown in employment growth suggests that getting a job is getting harder.

Business startups decline

A number of companies in recent weeks have announced job cuts.

In August alone, more than 25,000 people nationwide lost their jobs amid the turmoil in the financial industry. Some of that pain has come to this state as lenders, such as HomeBanc, closed. Other companies have cut jobs, including Nomaco Insulation in Youngsville, to reduce costs.

The layoffs add up. And slower economic times could be discouraging entrepreneurs who help provide new opportunities.

The number of new business filings in North Carolina has declined since May. Though monthly swings are not uncommon, the recent trend suggests at least some people might be holding off on new businesses.

We still buy new cars

One way to measure consumer sentiment is to see how people spend their money. When they feel flush, they're more likely to spend big.

New car registrations can give insight on consumer confidence. In the state overall, registrations declined 4 percent in July compared with a year earlier. In the Triangle they rose 7 percent. That means this region isn't feeling as much of an economic slowdown as other areas.

"The Triangle is very immune to those sorts of things compared to other markets," said David Johnson, owner of Johnson Automotive in Raleigh. "The Triangle is very resilient. It's a wonderful place to be."

Housing hiccups

The construction industry accounts for about 5 percent of North Carolina's economy.

But that figure doesn't paint the whole picture. Factor in real estate agents and other people who make a living because buildings are going up, along with retailers such as Lowe's Home Improvement, which has its headquarters in Mooresville, and the total effect is much larger.

That's why the uproar in the housing market is such a big deal: It can affect a lot of people.

North Carolina's housing sector has fared better than many other states', but it is slowing down. The number of new housing permits -- which gives a gauge of future construction -- is declining in the state and the Triangle. It suggests more fallout could be coming.