NORFOLK, Va. - More than a year and a half into the pandemic, local economists say the pillars of the Hampton Roads economy are strong, but say there are questions about the future.
Old Dominion University economists Dr. Robert McNab and Dr. Vinod Agarwal unveiled their annual state of the region report on Tuesday.
"The state of the region right now is promising, but there are clouds on the horizon," McNab told News 3.
Military spending is increasing. The tourism industry had a strong summer and the Port of Virginia is staying busy.
Health continues to be top of mind due to the pandemic. "Vaccines work. Vaccines are the key to economic recovery in Hampton Roads and in Virginia," said McNab.
Jobs are also key to the recovery. The report says more than 50,000 people have left the local labor force since February 2020. If you added them to region's unemployment rate in June, the rate would've doubled to nearly 11-percent, according to the report.
"We need to say how do we help people find new jobs. Worker education, worker training programs, investing in human capital - these are the long term solutions to the labor mismatch in Hampton Roads, the Commonwealth, and the nation," said McNab.
About 40-percent of the area's economy is dependent on the federal government. The report questions whether it's time for Hampton Roads leaders to more aggressively try to lure industry here. The report says Congress can be unpredictable and advances in technology could make some current military tools irrelevant.
"Our concern is how are we going to pivot when the national security of the United States has to pivot, so how do we build jobs in Hampton Roads?" said McNab.
Meanwhile, the tourism industry is slowing down as fall progresses. "As we hit October, things are really slowing down," said John Zirkle, the general manager of the DoubleTree Hotel near the Convention Center in Virginia Beach. "We've had more groups and conventions cancel this fall than we've had booked. That's a little concerning to say the least."
Still, Zirkle is remaining optimistic. "We're very hopeful looking forward. While groups, conventions, and corporate travel hasn't come back, we feel confidence as we get into 2022, the second quarter of 2022, we'll see demand start to pick up," he said.
The economists are taking the long view. "2022 is probably going to be better than 2021 - increasing defense budgets, increasing cargo traffic, increasing tourism," said McNab. "The question is how do we set ourselves up for growth at the end of the decade rather than just next year."
