The OUTER BANKS ECONOMY:
By: Dr. James Kleckley, Directory, Bureau of Business Research,
College of Business, East Carolina University.
The Outer Banks economy, a two county area on North Carolina’s northeast coast, is one of the healthiest in North Carolina – particularly when one considers that both counties are relatively small by statewide population standards. Although surely larger today, the latest population estimates from the Census Bureau1 showed that Currituck had an estimated 23,100 residents in July 2005. This made Currituck only the 78th largest county in the state (out of 100). On the other hand, since July 2000 Currituck has grown faster (5.2 percent annual average) than all the counties in the state, except two. Dare, at 33,900 in July 2005, is the state’s 67th most populated county and has grown by 2.5 percent since July 2000. While Dare’s rate is slower than Currituck’s, it is the 16th fastest growing county in the state and exceeds the statewide average annual growth found during the same period (1.5 percent).
Obviously, the 57,000 permanent residents of the Outer Banks comprise only a small portion of the 8.5 million North Carolinians. While we cite these statistics, one must note that the published Census data does not give a complete or adequate picture of the number of persons that constitute the peak population for these two coastal counties. For example, in a 2005 study for Dare County2, it was estimated that the effective peak seasonal daytime population of the county surpassed 220,000. In effect, Dare County supports services for a population that is nearly seven times the size of its resident population. While many of these visitors pass through Currituck County to take advantage of the Dare County hotels and houses, Currituck also experiences a similar, but probably relatively smaller visitor impact – although this latter impact is continuing to grow. In effect, both counties are largely tourist-oriented in nature.
The most recent available employment totals (November 2006) suggest that there were nearly 32,500 workers in this two county economy3. When one goes behind these totals and looks at the distribution of jobs, you will quickly see that this coastal economy differs from that seen in most parts of North Carolina – and is structured to support the tourist orientation and demand. Specifically, there are four sectors that show this orientation.
Construction, where more homes and business are being built to meet the needs of the ever-growing visitor and retiree population (8.6 percent in the Outer Banks to 6.0 percent statewide);
Retail trade, from souvenir shops to grocery stores (18.6 percent to 11.7 percent);
Real estate, rental and leasing, to sell the second homes and to rent the beach houses (11.4 percent to 1.6 percent); and,
* Leisure and hospitality, to meet the recreation, accommodation, and food service needs of the visitors (22.3 percent to 9.4 percent).
Higher interest rates and higher gasoline prices this past year have dampened the economic growth of the Outer Banks economy, but it did not halt the growth. Over the past year, employment in this two county area grew by 2.5 percent. This is slightly below the statewide average of 3.0 percent and represents an exception to the dramatic growth seen on the coast for the past several years. Specifically, since November 2000, the Outer Banks economy has experienced an average annual increase in employment of 4.2 percent, while during the same period the state grew by only 1.3 percent – meaning that these two Outer Bank economies largely avoided the recession seen by the remainder of the Tar Heel State. Further, the latest unemployment rate for the local coastal area was only 4.2 percent, which is below the statewide standard of 4.9 percent.
The aggregate annual retail sales data from the North Carolina Department of Revenue provides a similar picture to that seen in the employment data4. From the end of Fiscal Year 1999-2000 (June 2000) to the end of the most recent fiscal year (June 2006), gross sales in the two county Outer Banks economy expanded by an annual average of 8.7 percent, while North Carolina sales for this period only climbed by an annual average of 4.5 percent. The trend reversed in the last year as statewide sales climbed by 6.4 percent, while Outer Banks sales climbed only 4.5 percent. Most of the coastal sluggishness during the 2005-2006 fiscal year was in Dare County, which saw sales rise by only 3 percent. Gross retail sales in Currituck County rose 11.0 percent during the same period – demonstrating the ever-growing influence of tourists and population growth in this jurisdiction.
The 2007 outlook for the Outer Banks is predicated upon the health of the national economy and, to a lesser extent, upon the health of the other parts of North Carolina. One of the key factors to growth is the level of energy prices. Currently, oil and gas prices are below the levels that we found last year. If this relationship remains, North Carolina and the nation should grow close, but slightly below, their respective long run average. If gas prices return to higher levels, the respective economies should grow even more slowly, but should be able to avoid a recession.
For Currituck and Dare counties, we saw that the higher interest rates and higher gasoline prices slowed economic growth in these areas during the past year, as these factors dampened the pace of home sales and tourist spending. So, a turnaround in these national influences should enable the Outer Banks to realize relatively stronger growth. However, growth is not expected to return to record levels this year -- primarily as a result of a relatively weak housing market (as is seen in many other parts of the nation). Still, we should see an economy that is healthy and growing, as it continues to service the needs of its visitor population.
GROSS RETAIL SALES BY COUNTY:
Currituck County (July 1-June 30 fiscal year)
2000-2001 – 6,171,203
2001-2002 – 6,642,809
2002-2003 – 8,075,613
2003-2004 – 9,007,246
2004-2005 – 9,352,255
2005-2006 – 10,299,576
Dare County
2000-2001 - 32,677,568
2001-2002 – 37,945,115
2002-2003 – 43,704,715
2003-2004 – 46,954,220
2004-2005 – 49,883,303
2005-2006 – 51,604,582
Hyde County
2000-2001 – 1,468,890
2001-2002 – 1,629,930
2002-2003 – 1,775,561
2003-2004 – 1,727,385
2004-2005 – 1,747,431
2005-2006 – 1,819,018
Dare County Occupancy Receipts
1999-2000 - 172,840,144
2000-2001 - 206,518,209
2001-2002 - 230,604,056
2002-2003 - 245,041,479
2003-2004 - 252,919,735
2004-2005 - 263,990,649
2005-2006 – 288,420,136
Currituck County Occupancy Receipts
1999-2000 - 2,813,748
2000-2001 - 3,385,528
2001-2002 - 3,771,078
2002-2003 - 4,174,549
2003-2004 - 4,357,731
2004-2005 - 4,663,804
2005-2006 – 5,322,539
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Population Projections For Year 2010 (% Growth Predicted)
Currituck County - 23,746 30.5%
Dare County - 37,991 26.8%
Hyde County - 5,998 3.0%
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| Many economic reports for Dare, Currituck & Hyde Counties are available through the chamber office. For more information, contact the Outer Banks Chamber of Commerce at (252) 441-8144. |
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