The last year that Hampton Roads outperformed the national economy was in 2009. That year, the region’s gross product declined by 0.8%, compared with a national decline of 2.5%. The years that have followed the Great Recession have been tough for Hampton Roads. Since 2003, the region has lost almost 32,000 uniformed military personnel. This significant loss to the region’s military employment base has been exacerbated by a reduction in defense contracts resulting from cuts to federal expenditures (sequestration) that began in 2011. Over the past decade, the region’s private sector has been struggling against a consistent outflow of federal resources. When compared to similar sized metropolitan areas, Hampton Roads’ 10-year growth rate in gross product ranks 37th out of the 39 metropolitan statistical areas with populations between 1 – 4 million.
Over the past year, economic conditions in Hampton Roads have begun to improve. The steady out-flow of federal resources has receded, and we are once again beginning to see increases in federal expenditures. Civilian employment grew modestly over the past year, continuing the slow growth trend that the region has experienced since early in 2010. Employment gains in the Construction, Leisure & Hospitality, Scientific, and Healthcare industries more than offset employment declines in the Retail Trade, Local Government, and Administrative sectors.
The region experienced healthy growth in the labor force, adding 12,000 participants over the past year while reducing the number of unemployed residents by over 2,000. Unfortunately, the healthy labor force figures and the low unemployment rate have not yet resulted in significant gains in regional wages, though wage rate growth is expected to increase in 2020.
Tourism expenditures continued to grow in the region, notching 10 continuous years of growth for Hampton Roads’ tourism industry. Hotel revenues, employment in the leisure and hospitality industry, and visitor expenditures have all experienced positive growth in the past year.
Residential real estate has continued to see a slow but steady climb in home values, as building permit activity remains below long-term averages. While housing price growth remains tepid, the housing market is healthy and vibrant, with record average home sales prices, a record number of housing sales, and continued declines in the average length of time it takes to sell a home.
Projected increases in Department of Defense spending, unprecedented transportation infrastructure construction projects, continued growth at the Port of Virginia, and a healthy regional labor force are expected to push Hampton Roads’ economic growth rate past that of the Nation for the first time in a decade. 2020 looks to be a good year!
To view Janaury’s full economic monthly report, click HERE.