“We are in the second longest economic expansion in post WWII history. It is a time where slow and steady wins the day,” said Dr. Robert McNab, Director of the Dragas Center for Economic Analysis and Policy at Old Dominion University.
Dr. McNab alongside Dr. Vinod Agarwal, the Director of the Economic Forecasting Project at Old Dominion University presented the 2019 National and Commonwealth Economic Forecast at the Chamber Strome Business series on January 30th.
Chamber President & CEO, Bryan K. Stephens welcomed the audience and in particular the future business leaders of Hampton Roads from the ODU Strome College of Business. The Chamber means business and as a powerful economic partner, the event’s forecast resonated as a call to action within the Hampton Roads business community. “We are at a strategic turning point. Hampton Roads will grow and be recognized as a fast moving economy,” Stephens said.
Phillip Richards, Vice President of Community Investment with Chartway Federal Credit Union, Chartway was the Economic Report Sponsor said “The regional and statewide forecasts have become the gauge of the year ahead and countless decisions are made because of it. Thank you to the Hampton Roads Chamber who understands the needs of local businesses.”
Dr. McNab described the prospects for 2019 as “good, bad and potentially ugly, but despite uncertainty, the Hampton Roads economy will grow faster in 2019.” Some of the good points for Virginia and Hampton Roads specifically include: Price and wage inflation remain moderate and interest rates are still historically low. Amazon chose Virginia as one of their two HQ2 sites. Increases in federal discretionary spending caps continue to boost growth in Virginia, and federal business tax rates decreased.
“Amazon is a much better deal for Virginia than it is for New York,” said McNab. “By 2030 we are looking at 30,000 more Virginia jobs and a $14 billion all around benefit.” With this growth, there also comes growing pains. McNab highlighted increased traffic congestion in Northern Virginia as well as an increased cost in housing and rent prices. The influx of high paying jobs in one particular region of Virginia increases the pay inequality across the state. “If we don’t tackle this as a public policy issue for the Commonwealth, we’re creating more economic income disparity,” said McNab.
Regarding the partial government shutdown, the total cost and indirect opportunity loss may not be known for a full year. The Department of Defense is significant to the economy of Hampton Roads and Virginia. “All business cycles come to an end. When it happens, can we manage a soft landing?” asked McNab.
Dr. Agarwal emphasized improving prospects for 2019 with increased defense spending and with that, increased jobs and employment. “2017 was the first year where we exceeded our pre-recession job numbers and we continue to be moving in the right direction,” said Agarwal.
Residential housing in Hampton Roads is also looking up again. “There is an upward trend in the value of building permits and investments in multi-family homes,” Agarwal said. Also growing in Hampton Roads is the hotel industry. “We did quite well. The revenue per available room increased as did the supply of hotel rooms.”
Regarding the Port of Virginia, Agarwal indicated they are managing growth and “operating at near capacity,” said Agarwal. Defense, port, health care industries and tourism are likely to help the region’s moderate economic expansion in 2019.”
Both McNab and Agarwal concurred that the uncertainty in Washington D.C. will be a major concern.
In closing, Stephens reminded the audience to look to the positive and appreciate the assets we have in Hampton Roads that no other region has. “The tremendous defense, port and tourism industry we have here is like no other in the nation. We must work together in the business community to enhance and support these pillars,” said Stephens.
Thank you to our sponsors: Series Presenting Sponsor Union Bank & Trust and Economic Report Presenting Sponsor Chartway Federal Credit Union
The Chamber Strome Series continues throughout the spring. Save the date to join us on February 13th as Dennis Gartman presents a Traders perspective on the Capital Market and on March 6th as Deepa Subramaniam presents Collaboration and Innovation. Register for the events here.
Find the full Hampton Roads Economic Forecast presentation here.
Photo caption: Dr. Vinod Agarwal, Director, Economic Forecasting Project, Old Dominion University; Bryan K. Stephens, President & CEO Hampton Roads Chamber; Phillip A. Richards, Vice President of Community Investment, Chartway Federal Credit Union; Dr. Robert McNab, Director, Dragas Center for Economic Analysis and Policy, Old Dominion University