By Sam Wineka
news@salisburypost.com
With the economy on the tip of everyone’s tongue, local residents have changed their spending habits, and local businesses seem to be handling those changes.
The U.S. House of Representatives is expected to vote on a proposal today that would allow the government to spend up to $700 billion to buy bad assets from troubled financial firms. President Bush has urged House members to follow the Senate in approval.
While there is some concern, local businesses are doing what they can to stay afloat ó and it seems to be working.
“I think our menu and prices have benefited us because a family can eat here for the same price as McDonald’s,” said Scott Howard, owner of Uncle Buck’s Pub and Grill in Salisbury, which opened Aug. 1. “I would rather have 20 people in here, making a nickel off each one, than one guy spending a dollar.”
Howard said his restaurant has seen growth about every week it has been open. His philosophy has been not to panic.
Kay Rogers, manager at Wooden Stone Gallery in Salisbury, echoed that philosophy.
“Fear is a very deadly thing,” she said. “We’ve had a good year.”
She said that sales have slowed in the past few weeks, but that it was normal for the time of year.
Businesses that require help from banks for their day-to-day operation are feeling the pinch a bit more. Jeff Matthews, owner of landscaping company Distinctive Naturescapes, said individuals are spending less on their homes.
“The last couple of months some residential construction is slowing down,” he said. “I think there’s still enough commercial things in the pipeline, though.”
Matthews sometimes relies on bonds for specific projects and he said the cash for those projects is getting harder to come by.
“We do have a line of credit that’s still OK,” he said. “Money for project bonds is becoming harder to find. The scrutiny on loans is much harder. The cost of money is high, so it’ll be tighter for sure.”
Matthews doesn’t support the bailout of Wall Street, a bill that is supposed to make credit easier to come by. At least one bank official thinks it will.
“The credit markets are pretty much frozen for the moment until Congress takes action on this bailout,” said Mark Lewis, regional executive for Bank of North Carolina. “Right now with the economy so uncertain, most small banks are taking a wait-and-see approach. I’m pretty much limiting our lending to our customers, people who bank with us. We’re part of the Charlotte region and its sales are about half of what it was. I’m still lending to contractors for construction loans, but don’t come ask for a seven figure loan right now.”
Lewis supports the bailout.
“No matter who caused this, there’s been plenty of blame to go around. We’re bleeding badly, and you have to put a tourniquet on to stop the bleeding, then fix something.”
Outside of banking, however, many remain skeptical. Frank Goodnight, owner of Diversified Graphics and a member of the board of directors in the Raleigh Branch of the National Association of Small Business Owners, said his business is doing fine.
“We have not had any trouble,” he said. “Last year it was down and this year it is coming back like gangbusters, which makes no sense at all.”
He said the last meeting of the N.A.S.B.O. was business as usual and that he’s unsure of the bailout’s value.
“I’m probably in the undecided category,” he said. “I’m not thrilled about it. They’re putting liquidity in the system. The government is actually buying real estate which they’ll have no idea what to do with, and they cannot hire enough bureaucrats to deal with that bad paper.”
Randy Hemann, president of Downtown Salisbury Inc., said merchants have told him there’s a general slow down, but he says Downtown will continue to have its annual events that draw people to town, such as October Tour.
“Traffic in the events hasn’t seemed to drop off,” he said. “I think it’s because people are sticking close to home.”
And close to their local establishments.