On Tuesday, October 4 in Norfolk LEAD Hampton Roads, a program of the Hampton Roads Chamber of Commerce, presented its 17th annual State of the Region Address to the Southside audience at the Norfolk Waterside Marriot. The highly-anticipated event featured Dr. James V. Koch, President Emeritus, Old Dominion University, who was assisted by Dr. Robert McNab and Dr. Timothy Komarek, both of the Economics Department of Old Dominion University. Close to 600 business and community leaders attended.
Leading off with a welcome by Mark Handley, chair of the LEAD Board of Trustees and the Sr. Vice President, AECOM, the program got underway. Though the subject matter isn’t always uplifting, the focus of the State of the Region event is to inform the community on the region's economic strengths, challenges and inter-relationships, based on the annual report produced by the Regional Studies Institute at Old Dominion University. “Inspiration is communal,” said Lead Hampton Roads Executive Director, Angela Blackwell Carter, “our speakers give us the facts so we can come together to form a plan to do better.”
Dr. Koch opened the economic overview of the past year with a look at our regions “big three” economic pillars—defense spending, the port of Virginia, and hotels and tourism.
The overarching sentiment is that 2016 turned out to be very much like 2015. Our real regional GDP is expected to grow by 1.2% in 2016, much the same as its 1.1% increase in 2015. “Jobs are where an awful lot of our challenge lies,” said Dr. Koch, we’ve yet to recover all the jobs we lost in the great recession.” By mid-2016 Hampton Roads regional job total shows that we’re still about 10,000 jobs short.
Defense spending, or the lack thereof, is the one of the primary reasons the Hampton Roads economy hasn’t bounced back to the same level as the rest of the nation. “Couple the rising cost of weapons systems with the rising cost of personnel, and your defense dollar doesn’t go as far” said Dr. McNab. Hampton Roads has now experienced more than five years of little to no annual increase in defense spending.
The Port of Virginia, another pillar of the Hampton Roads economy has “rebounded smartly” said Dr. Koch, but is forecasted for smaller growth rates in 2017. Currently the Port of Virginia is capable of handling larger ships than our two major East coast competitors, Savannah and New York/New Jersey, but those competitors are already spending billions on remedying their deficiencies.
The third pillar, the tourism and hotel industry, has not rebounded from the Great Recession and the federal financial sequestration. Hotel room revenue increased by only 23.1% in the last 15 years, comparatively the state of Virginia has seen 63.5% increase, and the nation has had a 82.5% increase. However, Hampton Roads seems to be working its way out of the supply and demand imbalance which will hopefully improve occupancy rates for local hotels.
Dr. Koch, Dr. McNab and Dr. Komarek spoke briefly on other areas of the report, including the LBGTQ community, the housing market, the prison system, traffic congestion, and the risk of certain jobs of being eliminated by automation.
The address ended with a question and answer session touching on Hampton Roads net domestic out-migration, where residents are leaving the area for locations with healthier job markets. The event culminated in a final thought by Dr. Koch. “We have to think long run; focus on education, transportation, and investments in industry to diversify our economy. We need to get legislatures to think regionally.”
The LEAD State of the Region Address will be offered once more on Friday, October 7th at the Hampton Roads Convention Center in Hampton. Registratio opens at 7:45 a.m. and the program begins at 8:00 a.m. Click here for more information.
Thanks to our sponsors Optima Health (Presenting Sponsor), Capital One Commercial Banking (Platinum Sponsor), Bon Secours (Legacy Sponsor), PNC Bank and Damuth Trane (Gold Sponsors), and Clark Nexsen, Ainslie Group, Old Dominion University, Seventh Point, Cox Communications, and BB&T (Silver Sponsors).