Business news from the Fredericksburg region.
Employment forecast: slow recovery
BY CATHY JETT
Virginia’s economic recovery remains slow and uneven but better than the nation’s overall.
The commonwealth’s unemployment rate is lower than the national average, and it is recovering a larger percentage of jobs lost due to the recession, according to the 2012–2013 Virginia Economic Forecast.
Made available on Tuesday, it is the 13th annual report on the economy conducted by Chmura Economics & Analytics for the Thomas Jefferson Institute for Public Policy. The institute’s mission is to provide Virginia’s political, business, academic, community and media leadership with thoughtful, realistic, useful and nonpartisan analysis of public policy issues confronting Virginia.
The annual forecast projects a number of key economic data for Virginia. This latest one found that initial unemployment claims data, for example, indicate improvement in the labor market, though a quick return to pre-recession levels is unlikely.
Virginia’s unemployment rate peaked at 7.3 percent in January 2010, and has steadily trended downward. By March of this year, it had reached 5.6 percent. By comparison, the national unemployment rate peaked at 10 percent in October 2009 and now hovers above 8 percent.
Among the metro areas, the lowest March 2012 unemployment rates were recorded in Northern Virginia (4.2 percent) and Charlottesville (4.7 percent), the same metros that have had the two lowest unemployment rates in the state since December 2006. The highest metro area unemployment rates as of March 2012 were found in Danville (8.3 percent) and Bristol (6.7 percent), the report said.
Chmura Economics & Analytics expects employment will pick up this year as the labor market continues to heal, but it said a full recovery isn’t likely to happen quickly.
On an annual average basis, employment in Virginia fell 3.2 percent in 2009 and slipped an additional 0.1 percent in 2010 before advancing 1.5 percent in 2011.
Statewide, Chmura forecasts that employment will expand 1.7 percent this year after increasing 1.5 percent in 2011, and expects it to accelerate to 1.9 percent in 2013.
The projections are higher for Northern Virginia, where employment growth is expected to rise by 2.5 percent this year and 2.9 percent in 2013. That’s the second-best anticipated increase in the state for this year; only Blacksburg’s is expected to be better at 2.9 percent. Northern Virginia’s 2013 projected rate, however, is the highest statewide.
Metropolitan Richmond will lag behind both areas, with a 1.6 percent expected growth rate this year and a 1.8 percent increase projected for 2013, the report said.
With the recovery continuing at a tepid pace, wage and salary growth in Virginia is forecast to remain at 4.3 percent in 2012 before accelerating to 5.2 percent in 2013.
The report projects a higher rate for Northern Virginia: 5.1 percent this year and 6.5 in 2013. In the Richmond metropolitan area, wages and salaries are expected to grow 4 percent this year and 4.7 percent in 2013.
The housing market is beginning to show early signs of stabilizing, according to the forecast. The Virginia Association of Realtors reported that 83,748 homes were sold in the state in 2011, an 0.2 percent increase from 2010. The median sales price in December 2011 was $225,000, down 3.3 percent from a year earlier.
The Virginia Economic Forecast expects that single-family building permits will jump 8.1 percent in Virginia this year and a further 10.2 percent in 2013. The figures are slightly lower for Northern Virginia—6.8 percent this year and 9.7 percent in 2013, and in Richmond—7.5 percent this year and 9.3 percent next year.
Statewide, real retail sales—which are adjusted for inflation and do not include gasoline sales—are expected to improve 4.1 percent in 2012 and to accelerate slightly to 4.2 percent in 2013.
In Northern Virginia, real retail sales should increase 4.3 percent this year and 5.8 percent in 2013. In Richmond, they’re projected to rise 5.5 percent this year and 4.7 percent in 2013, the report said.
This year’s economic forecast also examines the impact and benefits of expanding access, bandwidth and speeds of broadband or high speed Internet in the commonwealth. It notes that while Virginia does better than national norms on measures of availability, it scores poorly in terms of its depth and prices vary significantly across the state.
According to the forecast, affordable and high-quality broadband Internet access will help invigorate Virginia’s economy and create jobs in three main ways:
Investment in broadband infrastructure creates jobs.
Broadband-enabled innovation expands the reach of small businesses.
And high-speed Internet access improves efficiency and expands educational opportunities.
Cathy Jett: 540/374-5407