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Some Specifics on W.Va.’s Economic Outlook

November 22, 2008
By WAYNE SHEETS, Contributing Business Writer

I had the opportunity to attend the 15th annual West Virginia Economic Outlook Conference in Charleston on Tuesday. The article that appeared in Wednesday's edition of The Inter-Mountain touched on the major points that were discussed, but I'd like to share some of the specifics that were highlighted during the event.

Dr. George W. Hammond, associate director of the Bureau of Business and Economic Research and associate professor of economics in the College of Business and Economics at West Virginia University, said that the state's economy, while perhaps not in a recession is teetering on the brink.

"During the past four quarters (second quarter of 2007 to second quarter of 2008) the state added just 3,100 jobs, which translates into a growth rate of 0.4 percent. This slow growth puts West Virginia in the danger zone of recession," Hammond said. "The national economy has experienced a job growth deceleration from 1.2 percent per year from mid-2003 to mid-2008 to just 0.2 percent during the past four quarters putting it in a likely recession."

According to Hammond, West Virginia manufacturing continues to shed jobs at an alarming pace. This sector has lost 7,300 jobs from mid-2003 to mid-2008, with a loss of 1,800 jobs in the last year alone. Statistics show that, while job losses during the past year have been widespread, most have been concentrated in durable manufacturing industries including wood products, transportation equipment, plastic products, chemicals and other non-durables.

The service providing sector has continued to grow at a relatively slow rate with the strongest job growth during the past year in health care, leisure and hospitality, professional and business services and government.

Construction employment in the residential sector is forecast to decline through 2009, as the state copes with the direct effects of the housing correction. These impacts are likely to be most keenly felt in the Eastern Panhandle region. Continued investment in non-residential structures and non-building activity such as roads, water, sewer and power plant construction, are expected to contribute to construction job gains during the next five years.

The forecast calls for the state's unemployment rate to rise to 6.0 percent in 2009. As job growth rebounds in 2010, the unemployment rate will gradually trend back to 5.0 percent by 2013.

Hammond said the forecast shows West Virginia will add residents, but just 2,900 per year, which translates into a 0.2 percent per year growth rate.

The state should experience job growth in natural resources and mining during the next five years, according to Hammond. This reflects expansion in coal mining employment and production in 2008 in response to strong demand and high spot coal prices. Both production and employment are expected to soften in 2009 as the national recession plays out. The state remains more reliant on mining activity than the nation as a whole, but this can translate into a risk to growth as the mining sector faces regulatory uncertainty related to clean water and air concerns.

Data showed that West Virginia's per capita personal income rose to $29,293 in 2007, before adjusting for inflation, but remained well below the national average of $38,564.

"West Virginia is forecast to follow the national economy into the downturn with little growth this year and continued job losses in 2009," Hammond said. "However, in percentage terms, West Virginia's job losses are not as large as those expected for the U.S. This stems from robust performance in natural resources and mining in 2008 and the fact that West Virginia is likely to be somewhat less impacted by the housing correction and financial meltdown than is the nation. Like the nation, job growth in the state rebounds in 2010 and continues through 2013."

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Michael Goldsmith, writing in the "My Turn" department of the Nov. 10 issue of Newsweek, talks about how he received his death warrant in September 2006 when doctors told him that he had amyotrophic lateral sclerosis (ALS), more commonly known as Lou Gehrig's disease and named after the New York Yankee Hall of Famer who died of it.

According to Goldsmith, the disease is so uncommon that medical researchers consider it an "orphan" illness - so few people have it that pharmaceutical companies lack financial incentive to invest in finding a cure. Since Gehrig died of the disease on June 2, 1941, more than 600,000 Americans have shared Gehrig's fate and medical science has made virtually no progress toward finding a cure.

The real issue here, aside from the greed factor, is that Goldsmith is trying to raise support for having the July 4 weekend designated as ALS or Lou Gehrig's disease weekend. He wants to let others know just how many people are affected by the disease and hopes the pharmaceutical industry will begin research to find a cure.

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A memorial fund has been established for Harry Jones, the longtime businessman who, with his wife, Mary, owned and operated McManus Gifts. Donations may be made by check or money order payable to the "Downtown Merchants Association" with a notation that the contribution is to be used for the Harry Jones Memorial Fund. The money will be used to purchase and plant a tree in downtown Elkins this coming spring. Donations may be dropped off at Ceramics with Class or mailed to: Ed or Elaine Griesel, 203 Davis Ave., Elkins, W.Va. 26241.

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Ed and Elaine Griesel, who helped with refreshments for the annual Veteran's Day Memorial Services at the All Veteran's Memorial, asked me to pass along their sincere thanks to all the downtown merchants who donated. Those businesses include the Steer Steakhouse, Skinner Insurance and The Inter-Mountain.

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A four-fold, color leaflet for advertising the unique shopping opportunities provided by the Downtown Merchants is all but complete. A draft was presented at the merchants meeting on Tuesday. A committee will be working with The Inter-Mountain over the next two weeks adding final touches for approval at the next meeting on Dec. 2. As mentioned before, the leaflet is not being designed to feature any individual entity or business, but rather to draw attention to the entire downtown area. The cost is being covered on a prorated basis by the downtown merchants.

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The annual Chamber of Commerce Christmas Parade will be on Dec. 5. The event begins at 6 p.m. and some downtown merchants are planning to extend their hours that evening and continue to do so each Friday until Christmas. Those that plan to extend their hours are hoping others will join them in providing the community and surrounding area the benefits of a unique shopping opportunity.

 
 

 

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