Contact: Dr. George Hammond, at the Charleston Marriott (304) 345-6500 on Thursday, Nov. 13, morning; (304) 598-2114 Thursday evening, or (304) 293-7876 on Friday, Nov. 14.
Researchers say West Virginia's Economy Continues to Grow
MORGANTOWN, W.Va. -- The West Virginia economy is forecast to grow and become more diversified over the next five years, according to the latest economic forecast from the West Virginia University Bureau of Business and Economic Research.
The growth is slower than it was in the first half of the 1990s but is still expected to average 1.4 percent through 2002, according to Dr. George Hammond, research assistant professor and author of the West Virginia Economic Outlook 1998. Hammond released his forecast at the university's annual economic outlook conference in Charleston Thursday, Nov. 13.
"While growth is expected to be slower, the forecast calls for the West Virginia economy to grow at rates close to those expected for the national economy," said Hammond.
However, there are risks to the forecast, Hammond said. If the national economy falls into recession, it will likely precipitate a recession in West Virginia as well. A moderate national recession during the next five years would cause a recession in West Virginia similar to what the state experienced in the early 1990s but not as severe as the 1980s.
The state should experience steady job growth with the unemployment rate remaining near its current level of 6.6 percent. Hammond predicts gains in the manufacturing sector, reversing a trend of job losses so far during the 1990s. Wood products, transportation, equipment, fabricated metals, and nonelectrical machinery producers lead job growth in the durable goods sector during the forecast. Printing and publishing jobs, thanks to the new Quad Graphics plant in Martinsburg, are expected to offset job losses in chemicals and apparel in the nondurable goods category.
Job losses in mining are expected to continue, although at a slower pace than during the 1990s thus far. Construction jobs are forecast to rise.
Services industry jobs continue to be the engine of job growth for the state's economy. From 1990 to mid-1997, 67 percent of new jobs were in services. This growth is expected to slow through 2002 but still drive job growth statewide. The growth slowdown in services arises in health care and social services. Hammond attributes this to managed care's increasing presence in the state and reduced growth in entitlement spending in health care.
Business services is expected to continue growing with increased jobs in telemarketing and computer programming. Travel-related services, like hotels and motels, are also forecast to add jobs through 2002, Hammond said. Government, trade, and finance, insurance, and real estate also expected to grow, but not as fast as services.
Inflation adjusted personal income growth is also expected to slow, both in net earnings from work and transfer income. Overall growth is expected to be below the national rate. In addition, the level of West Virginia per capita personal income remains well below the U.S. average.
The forecast calls for the state's population to grow at a slower rate during the forecast with all of the growth occurring in the 45-and-older age groups.
The annual forecast is part of the West Virginia Economic Outlook Series. For subscription information, call (304)293-7534 or e-mail [email protected].
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