Report anticipates lackluster economic growth in Virginia
WILLIAMSBURG, Va. (AP) — While Virginia’s economy has improved since the end of the Great Recession, it hasn’t kept pace with growth nationally and appears to be decelerating, according to a report from Old Dominion University released Friday.
The 2016 State of the Commonwealth Report by ODU’s Center for Economic Analysis and Policy measured unemployment rates, wages, labor market conditions, and the growth or decline of certain industries both across the state and in specific metro areas. For 2016, the report’s authors predict Virginia’s GDP will grow, but at a rate of less than 2 percent.
“It appears that Virginia’s economy is decelerating - not a fortuitous development, given that it was not growing very fast when the current slowdown began,” the report said.
Meanwhile, it found that national economic growth is expected to pick up at the end of 2016 and outpace Virginia’s through mid-2017.
“Folks, there’s no other way to say it: We’re being left behind,” Dr. Chip Filer, an associate professor of economics at ODU and one of the authors of the report, said at the Virginia Economic Summit in Williamsburg, hosted by the Virginia Chamber Foundation.
According to the report, declining federal government spending, which accounts for almost 30 percent of the Commonwealth’s GDP, has been the primary cause of the state’s sluggish growth in recent years.
The authors said that showed the need to diversify the state’s economy, and the report pointed out that other states such as North Carolina and Florida, which are also heavily dependent on federal spending, haven’t felt comparable contractions.
“The reason is that their private sectors, relatively speaking, are stronger than those of Virginia,” the report said.
The report also found that economic progress since the end of the recession hasn’t been evenly distributed across the Commonwealth.
For instance, only one metro area in Virginia, Charlottesville, had a post-recession real GDP growth close to the national average of around 2 percent. Charlottesville averaged 1.9 percent growth between 2009-2015, while Richmond and Hampton Roads averaged 1.1 percent and 0.7 percent, respectively, the report found.
Virginia Secretary of Commerce and Trade Todd Haymore also spoke at the conference, saying he would be “the first to acknowledge” that the economy isn’t growing as fast as officials would like. But he added that he believes Virginia’s hundreds of economic development projects in the pipeline will make a difference.
“So stick with us,” he said. “It may be sluggish, but stick with us.”