Editorial: Regional economy is growing, but election will shape our trajectory
After a prolonged period of sluggish economic activity that even predates the COVID-19 pandemic, things appear to be looking up for Hampton Roads. Unemployment is low, wages are increasing and inflation is, at long last, in sharp decline, data that mirrors national trends showing an American economy in robust health.
Whether Americans themselves believe that, however, is another matter entirely. The presidential campaign, as well as other races down ballot this year, could well hinge on if families are seeing the benefits of this economic revival or not.
Researchers at the Dragas Center for Economic Analysis and Policy at Old Dominion University this month released their State of the Region report, a compelling must-read each year. In it, they examine economic data for Hampton Roads, comparing it to the state and national data, and offer their expectations for what residents and businesses can expect in the year to come.
“We are seeing the Hampton Roads economy grow at a pace that (it) hasn’t grown, on average, for the last 15 years,” Bob McNab, Dragas Center director, said at a State of the Region event on Oct. 8. “In the 2010s, we were sitting on the sidelines watching other people run around the track. … Now with this economy, we’re on the track and we’re running in the middle of the pack.”
The report concludes that the regional gross domestic product grew by 2.4% in 2023, which matches growth across the commonwealth and lags only slightly behind national GDP growth, which was 2.5%. ODU researchers project an additional 2.2% growth this year.
The civilian labor force and the number of jobs reached all-time highs in Hampton Roads last year, dropping regional unemployment to 3.1%, or only 0.1% higher than it was before COVID cratered the economy here and around the world.
Past reports, even before the pandemic, found Hampton Roads struggling to recover from the great recession of 2007-08 and federal budget sequestration in the years that followed; the region only made up the job losses caused by those economic hardships in 2018. Job growth and economic activity did not keep pace with Richmond or Northern Virginia, or other similarly sized metro areas outside of Virginia.
That remains the case today. The 2% employment growth recorded here between 2019 and 2023 falls well short of Richmond (4.4%); Jacksonville, Fla. (8.9%); Charleston, S.C. (9.3%); and Raleigh, N.C. (11.2%).
Increasing our competitiveness with those areas will require progress in several familiar areas.
The region continues to depend largely on defense spending, travel and tourism, and the Port of Virginia, and a more diversified economy would help insulate Hampton Roads from challenges such as federal shutdowns or a port workers strike. And the cost of housing continues to outpace wage growth, squeezing family budgets and prompting residents to seek new opportunities and more affordable housing elsewhere.
The report’s authors make a familiar plea for regional cooperation on the latter issue, arguing that the propensity of residents to live in one Hampton Roads city and work in another dictates that more housing, as a region, would benefit all.
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But they also note that “Hampton Roads continues to be dependent on decisions made in the halls of Congress (or the lack of decisions made in Congress) regarding federal funding.” Changes to defense spending or military strategy would ripple through our economy, and the report calls for prioritizing completion of Interstate 87, connecting Hampton Roads to Raleigh, to boost commerce at the port. That makes this election, with races for president, Senate and the U.S. House, critically important.
The numbers suggest Hampton Roads is headed in the right direction, but inflation and high housing prices mean many residents are not seeing the benefits despite increased wages. How that informs their votes this year could well decide how — or whether — our recent growth continues.
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