Weak economy creates ripple effect for Outer Banks

By Connie Sage

A sputtering U.S. economy has meant a drop in new home construction, increased unemployment and more residents applying for food stamps in the Outer Banks.

The value of building permits issued in Dare County - Duck, Kill Devil Hills, Kitty Hawk, Manteo, Nags Head and Southern Shores - dipped $2.5 million for the first two months of this year compared with the same period in 2007, from $30 million to $27.5 million.

Even though new home construction has slowed - in Dare County there were 431 fewer building permits issued in January and February compared with the same time last year - there is increased competition among contractors bidding on remodeling projects.

Builders who once rejected those jobs are now competing for them, said Bo Taylor, president and owner of Bo Taylor Homes Inc. in Nags Head.

But even the demand for remodeling projects is not as great, and the jobs tend to be smaller, Taylor said.

"Those things reflect the national economy and people's uncertainty about where we're headed," he said.

They're asking, " 'What's next? Am I going to lose my job?'

"When things were really busy here, people were happy just to have someone call them back."

Two out of the three counties reporting the highest jobless rates in January are in northeastern North Carolina, according to figures recently released by the Employment Security Commission.

Dare County's estimated January jobless rate was

10.1 percent, compared to 7.1 percent in December and nearly double the state's 5.3 percent rate in January. Neither statistic is adjusted to eliminate seasonal fluctuations such as weather, holidays, or the opening and closing of schools.

Neighboring Hyde County, which includes Ocracoke, had the state's highest jobless rate at 11.1 percent, and Swain County, in the far western part of the state, was at 10.5 percent.

However, the percentage of those without jobs was about the same for both counties for the first two months of 2007, and the unemployment rate historically drops in the Outer Banks to as little 3 percent by

summer.

The latest state unemployment rate, released Friday, was 5 percent, and is seasonally adjusted, according to a spokesman for the Employment Security Commission. The national unemployment rate is 4.8 percent.

As jobs become scarcer, applications for food stamps increase.

"The food stamp program is very much based on employment," said Jay Burrus, director of the Dare County Department of Social Services. "It reflects the economy."

The number of households receiving food stamps in Dare County climbed by nearly 14 percent, from 547 in December to 622 in January, according to the latest available figures.

"This is certainly one of the worst downturns that we've experienced for some time in Dare County," Burrus said.

There is a silver lining.

Higher gas prices could be a plus for Outer Banks tourism, and the number of local home sales is trending upward.

As gas prices head toward

$4 a gallon, vacationers who live within a day's drive of major population centers are more likely to choose the Outer Banks, said John Bone, executive director of the Outer Banks Chamber of Commerce.

The area is a family destination, Bone said, so visitors can come to the Outer Banks "for a relatively economically pleasant vacation," compared to more expensive coastal communities.

And while the number of single-family residential home sales in the Outer Banks is less than half of what it was for the first three months of 2005, one of the peak years, the numbers are encouraging, according to Monica Thibodeau, president-elect of the Outer Banks Association of Realtors.

A total of 199 single-family homes were sold in January, February and through the last week of March, said Thibodeau, who also is mayor pro tempore of Duck. That compares with 279 sales for the same period in 2007 and 458 sales in 2005.

But this year's trend is improving, with 58 single-family residential homes sold in January, 60 in February, and 81 as of the last week of March.

Rentals for the upcoming season are at or above those last year, said Thibodeau, owner of Carolina Designs Realty.

With many economists already claiming that the country is in recession, Outer Banks businesses this summer will have to work a lot harder to provide services and keep people coming here, Bone

said.

"It will be more difficult to get visitors to do some of the extras for their vacations," Bone said.

"They'll be looking for that value for their dollars."