State of the Commonwealth: Good Times Are Here, But for How Long?
December 12, 2019
Robert McNab
Five years is a lifetime in the economic health of a region, a state, or a country.
For the past five years, the Virginia economy has grown, putting the multi-year malaise that gripped the Commonwealth following the worldwide economic slowdown of 2007 in the rearview mirror. But the 2019 State of the Commonwealth Report, produced by Old Dominion University's Dragas Center for Economic Analysis and Policy, cautions the factors that make Virginia hum, comparatively, are the same ones that were at the root of the malaise.
"Federal spending has risen in the latter half of the current decade, fueling economic activity in Northern Virginia and Hampton Roads," wrote Robert M. McNab, professor of economics in the Strome College of Business and State of the Commonwealth Report editor.
However, "stable" is not a word that would accurately describe the current federal environment. Uncertainty over electoral politics, trade, immigration and other flashpoints means we must balance "the recent spate of good news with the growing uncertainties of the long term," he wrote.
The report was released online on Sunday, Dec. 15.
The report forecasts that real GDP growth for Virginia will exceed 2% in 2019, driven by increases in federal spending and job creation in the private sector. A record number of Virginians were employed in 2019, and the statewide unemployment rate dropped below 3%. Good news, but also a challenge for employers to find and retain talent.
The good news is also tempered by signs that the global economy could be on the precipice of a slowdown, particularly because of trade conflicts with China and Europe.
Adding to the uncertain economic environment is the fact that the federal deficit has ballooned throughout the economic expansion, adding trillions to the U.S. debt. When the economy inevitably slows, whether next year or in subsequent years, there will be hard choices for lawmakers. "A storm is coming, and when we come through it, we will be different," McNab said.
As it does every year, the State of the Commonwealth report includes chapters examining other issues of importance to Virginia. The 2019 report includes chapters on Virginia's metropolitan areas, the Virginia Retirement System, Marijuana in Virginia and a primer on federal spending in the Commonwealth.
For two decades, Old Dominion University's influential State of the Region Report has provided a thorough, engaging look at life in Hampton Roads. It was joined by a companion State of the Commonwealth Report, which is celebrating its fifth anniversary this year.
Related: ODU's State of the Commonwealth Report Makes Four Suggestions to Improve VRS
For more information, please see the Dragas Center WEBSITE.
