Bacon's Rebellion

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Hampton Roads Still Stuck in the Economic Doldrums

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by

James A. Bacon
in

More disappointing news from Old Dominion University’s economic forecast for Hampton Roads: sub-par economic growth of 1.41% in 2017. That’s slightly below the state’s anemic 1.44% growth rate. While Congress and the President have agreed upon a sustained increase in military spending, the economists don’t expect a significant impact on the region until 2018.

The forecast expects employment growth of 3,800 for the region, concentrated in firms providing professional and business services, leisure and hospitality, and health care services — leaving the region 6,500 jobs below its record, pre-recession employment. Unemployment will decline to 4.4%.

Economic recovery is being led by the private sector. Among primary industries, the forecasters say that the factors contributing to a 6.7% increase in tourism last year should remain in place in 2017: moderate increases in federal travel, low gasoline prices, and economic growth in Hampton Roads’ historic market areas. Meanwhile, the port sector has recovered traffic losses experienced after the recession and is setting record volumes. Major capital investments have made port operations more efficient, and bigger ships, utilizing Hampton Roads’ deep channels, have been calling at the port.

But the military and naval shipbuilding continue to dominate the regional economy — defense spending accounts for 37% of domestic regional product — so, absent a large flow of expenditures from Uncle Sam, Hampton Roads is unlikely to break out of its economic doldrums this year.

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7 responses to “Hampton Roads Still Stuck in the Economic Doldrums”

  1. LocalGovGuy Avatar
    LocalGovGuy

    Any thoughts on whether Virginia Beach’s transoceanic data center could bring some fresh economic growth to the region?

  2. LarrytheG Avatar
    LarrytheG

    any thoughts on the fact that Hampton’s economic health depends on how big the Federal deficit and debt will grow?

  3. TomH Avatar
    TomH

    Hampton Roads could invest in a major overhaul of its economy with little investment required. Some coordination and perhaps some grants and stimulus money from the state would repay itself many times.

    If Hampton Roads were to join together as a region to embark on large scale energy efficiency projects, local employment would soar. Energy efficiency already employs nearly 2 million workers in various building trades nationwide. And it is on a steep growth curve.

    Local development and building trades leaders could join together to revamp the area. Image if the Hampton Roads area could become the low-cost occupancy area for federal installations. The region would not only sustain their current economic activity but create the climate for much more.

    This can be done with no up front investment on the part of the federal government. NAS Oceana, near Virginia Beach, recently completed a project with an Energy Service Company (ESCo) that required no upfront investment, which required workers from a variety of building trades to retrofit over 100 buildings on the base over several years. The naval air station is now saving over $6 million per year on energy costs.

    This is a priority for the DOD worldwide and I would think they would be interested in collaborating with a region that hosts the world’s largest naval base.

    Tens of thousands of long-term jobs would be created by such a venture. Contrast this to all the effort that has gone into attracting a fertilizer plant that might employ a few hundred people for a decade or so before natural gas prices rise so much it is no longer economic.

    This region should be especially sensitive to choosing options that contribute to climate change. Because the land is sinking and sea level is rising, this region is expected to have the second fastest increase in sea level behind coastal Louisiana. Sea level is rising all along the Atlantic Coast faster than it is globally. Most of Norfolk is less than 15 feet above sea level, and low-lying neighborhoods already flood regularly when heavy rains combine with high tides, swamping storm-water systems.

    “The changes we’re seeing just over 20 years are more than enough cause for real concern.”
    -Carl Hershner, Virginia Institute of Marine Science

    The city of Norfolk is currently considering $140 million in projects for just four neighborhoods.

    Let’s help turn things around for the second most populated area in our state. Virginia should help put them on a 21st century trajectory of modern energy solutions that create tens of thousands of long-term jobs and lower our energy costs.

  4. LarrytheG Avatar
    LarrytheG

    The most valuable opportunities for places like Hampton is to latch on to the advanced technologies that DOD is employing in it’s Navy and “Joint”…

    for instance, if drones are going to be part of a Ship’s assets.. and will have a local presence to support the installation on the ships… that becomes an opportunity for the State to incentivize private investment in that area – make it EASY for startups and moves by companies from other areas…

    these companies, once they get going, may well be able to continue on even if DOD cuts back.

  5. TooManyTaxes Avatar
    TooManyTaxes

    It would be interesting and likely necessary, IMO, to determine the percentage of wealthy people and big businesses that own property near shorelines that are predicted to be reduced due to higher ocean levels as a result of global warming. Does increasing the cost of energy produced by carbon-emitting fuels result in a big transfer of wealth from lower and middle income people to the more wealthy and big businesses? I don’t know and, for the purpose of this discussion, I’m not arguing for or against remedial efforts to address higher ocean levels and retreating coast lines. I’m just trying to figure out who pays and who gains?

  6. LarrytheG Avatar
    LarrytheG

    this is an easy answer TMT. Just do away with the FEMA flood insurance program.. and see who hollers the loudest.

    The GOP in Va and NC are both staunchly opposed to NOAA/FEMA providing flood maps… because the loan companies use them when making loans for properties.

    If you stop subsidizing Flood insurance.. what will happen to the housing industry? Well.. the banks will stop making loans for properties.. for one.

    what does that mean? I suspect what it means is that the Barrier Islands and waterfront properties will only be for the rich who can self-insure.

    Those who needs loans or insurance are going to be out of luck.

  7. TooManyTaxes Avatar
    TooManyTaxes

    Larry Senator Menendez (D-NJ) introduced the bill, signed by Obama in 2012 to roll back the flood insurance rate increases caused by the earlier phase-out of the subsidies.

    My point still stands – would the introduction of a carbon fee on utility bills result in a transfer of funds from the lower and middle classes to the wealthy and to big business? That’s the very type of transfer the WaPo editorial board loves. Anything that looks or smells like a tax is good even if it transfers wealth to the wealthier.

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