Think of Southeastern North Carolina as a place where high-level economic decisions worth billions are made, where thousands of contractors flow from every corner of the country to get their share, observes the Wilmington Star News.
That’s what the massive buildup at Fort Bragg and Camp Lejeune is to the region, according to panelists who spoke at the annual economic outlook conference at the University of North Carolina Wilmington.
“North Carolina has fared very well in each round of BRAC,” said Richard McGraw, a former senior Department of Defense official. BRAC stands for Base Closures and Realignment Commission, and the program has resulted in closing or consolidation of hundreds of military installations in the country since it began in the late 1980s.
That has meant big wins for the region. Fort Bragg scores as the U.S. Forces Command moves from Fort McPherson, Ga.
The expansion of Camp Lejeune “is the equivalent of a corporate headquarters moving to North Carolina,” said Scott Dorney, executive director of the N.C. Military Business Center.
By 2013, the growth of the military in the region here will produce an additional $1.7 billion in disposable income, McGraw said.
“Where are they going to spend it?” he challenged the crowd, comprising mostly Wilmington-area business people.
When the lights go out in Georgia next Sept. 15, as retired U.S. Army Col. Don Porter put it, there will be 30 to 35 generals, four- and three-star, based at Fort Bragg in Fayetteville. They are the people who will have military contractors lining up; they are the decision-makers.
The military opportunities have arrived amid a local economy whose growth is flat, said William “Woody” Hall, the UNCW economist who forecasts the area’s economic picture yearly.
The same is true of the housing market, where prices are still slipping a bit as inventories remain high, said Chris Livengood of Intracoastal Realty. He was part of a real estate panel including Teresa Huffmon of Coldwell Banker Commercial and Ralph Huff of H&H Homes Inc. in Fayetteville.
Huff said that the key to the military home-buying decision is (1) how many minutes to their job on post; (2) the school system; and (3) the location of the spouse’s job. He pointed out that some military personnel live in Wilmington because that is where the husband or wife works.
The military market, however, is much more promising outside of real estate, McGraw said.It’s not just jets and guns, said Dorney. There’s even a contract out for a day spa at Fort Bragg.
Lending by banks and spending by business are likely to increase somewhat but are heavily influenced by uncertainty over economic and regulatory policy, said Thomas Simpson, executive in residence at UNCW’s Cameron School of Business.
Although there is a severe oversupply of homes on the market, “stabilization of prices has given me some reasons for comfort,” he said.
The three-county growth rate will remain flat with 2009 and stay that way into 2011, said UNCW’s Hall. That rate is less than a third of the annualized growth rate from the mid-1990s through 2007.
Unemployment is not getting any worse, Hall said, but we have a long way to go. The average monthly employment in 2009 was the same as in 2004.
Retail sales figures have been relatively stable over the first five months of the year.
Wilmington’s commercial real estate market was worth $108 million in 2007, said Huffmon of Coldwell Banker Commercial. Forty percent of that was land sales.
By 2009, the figures had declined to $21 million, she said.
“We’re starting to see a slight increase,” she said, with a trend toward $34 million for all of 2010.
The residential market is flat, said Intracoastal’s Livengood. “It’s moving sideways with a slight tendency for prices to continue to decline.”