Outer Banks Economic Forecast
At a recent Economic Forecast breakfast at the Hilton Garden Inn in Kitty Hawk, Dr. James Kleckley, Director, Bureau of Business Research, Department of Finance at ECU, painted a cautiously optimistic picture of the Outer Banks economy. â€œWeâ€™re going in the right direction, though weâ€™re not going as quickly as we would like,â€ he said.
A number of factors went into his positive assessment, although he did raise concerns about gas prices and noted that the national debt is a sword of Damocles that must be addressed.
Of more immediate and local interest, Kleckley discussed why visitation to the Outer Banks has remained consistently high. Even as the U.S. economy was shedding jobs with a national unemployment average that topped 10%, people continued to come to the Outer Banks.
Kleckley pointed out, that neither Virginia nor Raleigh–the primary markets for this region–saw the large scale contractions other parts of the country did. Unemployment in the Raleigh area ranged from 6.3-7.5% and in Virginia, the stateâ€™s unemployment rate never rose above 8%.
Retail sales–which are linked to tourism–will continue to grow. Even as the nationâ€™s retail sales dipped 6-8% in a quarter, the tax revenues from this area did not show the same level of decline. Over the past two years, retail sales are showing 4-5% annual growth, significantly outperforming the national average.
The housing market is showing signs of life again, although Kleckley did not see a quick recovery, â€œI donâ€™t think that what youâ€™re going to expect is something in line with the real boom that you had,â€ Dr. Kleckley said. â€œI think itâ€™s very unlikely that youâ€™re going to get back to the real high levels (of growth) that you had before.â€
He noted that the downturn on the Outer Banks did vary from both the national and state norms. â€œWhat you saw when you went through your bubble here, the (housing) downturn started much sooner and it was much more severe, than the rest of the state,â€ Dr. Kleckley said. â€œBut since just about 2007, itâ€™s been pretty steady in terms of existing home sales. In 2009 it (pricing) really hit bottom at the same time the state did, but the average value starting to recover. Not a whole lot, but recover nonetheless. North Carolina went up and then down and now itâ€™s stayed down. It certainly doesnâ€™t help because your levels are low, but you are doing better than the state as a whole.â€
â€œExisting home sales are recovering, and this trend will continue,â€ he added. â€œI think your real estate (recovery) is going to be something more in line with what you had before the boom.â€
Reviewing the data he compiled on the Outer Banks, Dr. Kleckley predicted a good season now and into the near future. â€œThings will start growing again. There will be a sustained level of growth from year to year,â€ he said. â€œThe tourists will still come. But their patterns will remain conservative. Maybe they wonâ€™t go out to eat as much as they did before.â€