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Berkeley economy 'hanging in there'

January 21, 2009|By MATTHEW UMSTEAD

Editor's note: This is the first of two stories focusing on the ups and downs of the struggling economy and its impact on Berkeley County. Click here to read the second story.

MARTINSBURG, W.Va. -- Battered by a housing market crash that is part of a national recession, Berkeley County's economy isn't knocked out cold, according to business leaders.

"It's not completely stopped," said Tina Combs, executive director of the Chamber of Commerce of Martinsburg and Berkeley County.

Amid tough economic conditions, most of the Chamber's 500 members are "hanging in there" and new investment - most notably The Commons shopping plaza anchored by Target and eight other stores - still is on track to open this year, Combs said.

"I encourage the local people to support the local businesses," Combs said.

The exodus of hundreds of jobs from the Eastern Panhandle last year has continued and the unemployment rate in Berkeley, Jefferson and Morgan counties has climbed with the losses, according to statistics compiled by Workforce West Virginia.

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Berkeley County's unemployment rate of 5.4 percent in November 2008 spiked nearly 1.5 percent over 2007. The June 2008 mark of 5.9 percent was the highest since 6.3 percent in February 1997, according to data compiled by the state. Morgan and Jefferson counties also marked previous highs that year.

In March 2008, the Eastern Panhandle saw the loss of about 400 jobs with the abrupt shutdown of AB&C Group's plants in Ranson and near Martinsburg.

In August 2008, Knouse Foods Cooperative Inc. announced the shutdown of its applesauce production in southern Berkeley County, affecting about 90 employees there.

Two months later, book printer Quebecor World told employees at its Berkeley County plant that it was cutting production. And earlier this month, printer Quad/Graphics announced the layoff of 35 people.

County unemployment data for December 2008 was not scheduled to be released until Friday, but only Jefferson County's November 4.2 percent unemployment rate was lower than the state seasonally adjusted figure (4.9 percent) announced last week.

Eastern Panhandle Home Builders Association executive director David Hartley said he has seen a number of companies in the building industry close their doors as the housing crisis has unfolded.

"Our membership is down about 10 percent from last year," Hartley said. "Everybody's feeling the crunch."

Still, Hartley believes there is a sense of optimism with the arrival of a new administration in Washington.

"We all hope they're up to the challenge," Hartley said.

With any national stimulus plan to stabilize the economy, Hartley said the National Association of Home Builders is pushing for Congress to "fix housing first" and provide a 10 percent tax credit for homebuyers.

While the inventory of homes on the market is coming down in the Eastern Panhandle, Hartley said foreclosures are "the biggest wild card" to the housing market's recovery.

Hartley readily acknowledges the cyclical nature of the industry, but says this swoon has been longer and more deep than others.

"It's tough. There's no doubt about it," Hartley said.

If there is a "bright spot" in the housing market to be found, Hartley said small homes and environment-friendly, "green" construction is where most activity is happening.

Even with the economic downturn, Hartley said the Eastern Panhandle Home Builder Association's 14th home show at the Martinsburg Mall next month "is looking very strong."

The home show will be Feb. 27 to March 1 at the mall, which has been caught up the recession as well.

Earlier this month, the company that owns the commercial property was placed in receivership by a circuit court judge who ruled that debt payments were not being made since September 2008.

"I think the mall is going to be OK," Combs said.

Like other shopping centers, the mall lost national chain stores B. Moss Clothing Co. and KB Toys, but Combs said she believes the property, which opened in 1991, still has a lot of potential.

Development of The Commons is expected to continue, with retailers on track to begin opening in July, officials said earlier this month.

Berkeley County Development Authority Executive Director Stephen L. Christian said the developers of 45-acre project near Exit 12 of Interstate 81 had confirmed that all nine anchors of the shopping center had signed pre-lease agreements.

Permits for a Target, TJ Maxx, Books A Million, Staples, PetSmart, Michaels, and Dick's Sporting Goods all are on file with Berkeley County planning and engineering departments for the plaza.

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