Bacon's Rebellion

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The Hampton Roads Economy in Two Graphs

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by

James A. Bacon
in

Recession recovery in the U.S., Virginia and Hampton Roads, measured by total jobs restored, 2007-2015. Source: "The State of the Region: Hampton Roads 2015."
Recession recovery in the U.S., Virginia and Hampton Roads, measured by total jobs restored, 2007-2015. Source: “The State of the Region: Hampton Roads 2015.”

Hampton Roads didn’t have a bad year in 2014 — its economy grew 1.34%, higher than its growth rate in five of the previous six years. But that growth still didn’t come close to getting the economy back to pre-2007 recession levels, according to the 2015 “State of the Region” report published by Old Dominion University’s Center for Economic Analysis. The region still employs 15,000 fewer employees than in 2007.

The recent decline in defense spending — 3.2% below its 2011 peak — hasn’t helped (although it’s worth noting that defense spending is higher than in 2007).

Estimated direct Department of Defense spending, 2000-2015. Source: "State of the Region."
Estimated direct Department of Defense spending, 2000-2015. Source: “State of the Region.”

Writes lead author James V. Koch, ODU president emeritus:

The upshot of declining DOD spending is that it has forcibly diversified the Hampton Roads economy. We estimate that only 39.3 percent of our regional economic activity could be attributed directly and indirectly to defense spending in 2014. This is down from 44.9 percent in 2011 and our all-time high of 49.5 percent in 1984.

The region’s three other main industries are tourism, shipbuilding and ports. Tourism, as measured by hotel revenues, had yet to recover to 2007 levels by 2014 (although they may do so this year). Within the tourism sector, Virginia Beach has gained market share while the Historic Triangle has lost. Shipbuilding has been a bright spot; industry employment exceeds 2007 levels by 4,600 jobs.

Direct port-related activities account for 6% of the Hampton Roads regional economy. Cargo shipments reached a record level in 2015 at 210,000 twenty-foot equivalent units (TEUs). Despite important advantages such as deep channels, cargo growth lagged that of East Coast ports as a whole. But the ports may represent the region’s best best for diversification from the military, the report suggests. It is well situated to handle the giant super-ships dominating the sea lanes. If the ports can deal with some off-terminal productivity issues, the could see continued growth.

— JAB

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4 responses to “The Hampton Roads Economy in Two Graphs”

  1. LarrytheG Avatar
    LarrytheG

    re: defense spending

    this is supposed to be the part where you talk about the govt taking money out of people’s pockets and killing the jobs that would have existed if the folks could have kept their money to spend on what they wanted.

    right?

    😉

  2. Acbar Avatar
    Acbar

    Jim, what are the current limitations on the success of Hampton Roads as a ring of port cities? Are there bottlenecks in infrastructure (rail or roads), or labor, is the harbor deep enough? Is it lack of proximity to those who manufacture and import and export (i.e. those who use ports)? Is the H.R. region’s growth uncoordinated and incapacitated by jurisdictional in-fighting? Will the gas pipelines help? Why are Baltimore and Charleston SC building container-port expansions like mad; and is comparable activity happening at H.R. that we don’t hear about?

    My fear, simply because we don’t hear otherwise, is that Virginia is falling behind in this competitive race to attract growth to the ports of Hampton Roads. And I assume that we are dividing a finite pie here, in terms of East Coast container port capacity.

  3. LarrytheG Avatar
    LarrytheG

    perhaps, the reality is – that Virginia could well LOSE port traffic to other competing ports.. or we will have to invest money – just to keep what we have.

    Few north of Washington are going to get containers via Hampton because getting those containers north through Washington is problematical road or rail. Forget trucks on I-95 north – and freight rail through DC is not much better.

    That leaves the South and the Midwest.

    South – we’re competing with a phalanx of ports – Charleston, Savannah Jacksonville, Tampa, Mobile, New Orleans, – etc…

    so Va’s pie-slice opportunity is likely the Midwest via rail to Roanoke and I-64/I-81 west.

    the US 460 project was almost surely predicated on serving the ports but at a billion plus – in addition to what the ports want – all taxpayer money… big ticket money and no guarantees we’re going to get that much more and this stuff should have been planned a decade ago.. it’s almost too late now.

    might be interesting to see what infrastructure, if any, freight rail in Va is upgrading.

    re: shipbuilding – isn’t most of that Govt?

  4. TBill Avatar
    TBill

    Is there a NoVA equivalent chart? The thing is also we have a state tax policy that to some extent hits NoVA and Hampton Roads harder on the basis of economic strength.

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