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.
