By Dave Yochum. The economic outlook for 2017 is brighter than 2016, bankers and economists say, despite concerns it could have been a recession year.

Wells Fargo is forecasting a 2.1 percent growth in Gross Domestic Product next year, up from 1.5 percent this year. Of course it’s lower than 2015’s 2.6 percent and 2.4 percent GDP growth in 2014.

Growth next year—another 2.1 percent is forecast for 2018—may even go higher, based on the “Increased proablity of tax cuts and possibility of infrastructure spending” in the Trump Administration, said Mark Vitner, senior economist with Wells Fargo.

Vitner forecasts continued in-migration to the Charlotte region, as millennials and other generations seek out warmer climes, reasonable housing costs and employment. Wages are expected to grow, too, ahead of inflation. That means an increase in consumer spending, which accounts for almost three-fourths of U.S. economic output.

Consumer spending turns on employment and salary growth as well as lower gasoline and grocery costs. Rising out-of-pocket health care costs are an offset, he said, but there seems to be enough fuel in the tank to keep consumer spending growing at around a 2.5 percent pace next year.

In spite of HB2, North Carolina is still ranked as one of the most competitive states for businesses as well as quality of life, he said. “We will continue to see folks and businesses moving here,” Vitner said, acknowledging that some expanding companies have crossed North Carolina off their list.

The in-migration, not to mention the frequently intimate nature of banking relationships, helps local financial institutions. Indeed, Jim Engel, CEO of Cornelius-based Aquesta FInancial, is forecasting year-over-year loan growth between 5 percent and 10 percent.

“Considering a national economy growing at less than 2 percent, we are very fortunate to live and work in this dynamic economic environment,” he said. “Our view is that the local economy remains robust.”

The influx of new residents has kept pace with the apartment building—a good trend for those commercial loans. New single-family home construction remains strong in Lake Norman “but is hindered by a scarcity of ready-to-build lots,” Engel said. “We expect that 2017 will remain strong although increasing interest rates will temper growth somewhat.”

Vitner said the long-time edge that South Carolina has had is a thing of the past. “They had been very successful recruiting from North Carolina, but taxes are not the incentive any more,” he said. South Carolina’s economic development success at the expense of North Carolina may hurt in the long-run; “their cup runneth over,” he said, explaining that intense congestion has a limiting effect.

Regarding highway infrastructure, the incoming president’s mindset is more in line with private sector funding, i.e., toll roads, than outright government spending. The Trump Administration’s thinking around tax cuts is apparently further along than it is around infrastructure improvements. “The infrastructure program that he has put forward has many more moving parts…the infrastructure spending will take a long time to roll out,” Vitner said.

Regarding congestion in Lake Norman on I-77, which is not expected to improve even with toll lanes, he said the largest companies might want to tap into the local labor market with satellite offices. “Some firms have located into Ballantyne to attract workers who don’t want to drive into uptown…there could be satellite offices in Lake Norman but only a few companies might do that—the largest employers,” he said.

In Charlotte’s favor over the long term are moderate home prices. Charlotte has pushed out both north and south, he said, helping keep a lid here on price increases. “Employers look for a stable work force and whether they can afford to buy a home. A lot of cities that are very affordable, no one wants to live there. Other large cities may be growing as fast as Charlotte, but the prices here are a little lower,” he said.

He sees downtown redevelopment in Mooresville and Kannapolis as an ongoing trend that will catch on in other close-in suburban towns as a new kind of “suburban-urbanism” continues to take hold.

Business equipment outlays have fallen for the past four quarters, unprecedented outside of a recession. Much of that recent weakness has been due to cutbacks in the oil sector, where drilling activity plummeted along with the price of oil and natural gas, according to Wells Fargo

With the White House and both houses of Congress in Republican hands, the Trump Administration should be able to select a cabinet and staff various agencies much more quickly than the recent administration. The regulatory environment for business should improve, as agencies likely will focus more on ways to reduce regulatory burdens, Wells Fargo says.

While consumer confidence is up, how long it lasts is anybody’s guess. It really depends on genuine improvements in the economy. Presidential honeymoons can end if they are not accompanied by real gains.

“While lower taxes and increased defense and infrastructure spending are potentially huge stimulative forces, their impact is much more likely to become apparent in 2018 than in 2017. Trade and immigration reform will also take time to be implemented, and may produce a slight near-term drag on growth and push inflation and interest rates higher longer term,” Vitner said.