“The chamber wants to emphasize that we are all in this pandemic together and together we will get through this. Economic recovery is coming, and when it comes we will be stronger,” stated Bryan K. Stephens, President and CEO of the Hampton Roads Chamber.
The Hampton Roads Chamber hosted the 19th Annual State of the Region, an event designed to set the conditions for businesses to succeed by providing data from the ODU Dragas Center for Economic Analysis and Policy. The Annual State of the Region was presented both in-person and via webstream to an audience of community and business leaders.
“Just by being here, I think that is a testament to the resilience of the region. The fact that you are willing to spend your time learning about how the region is faring in 2020 is a good sign” opened Dr. McNab. Though Hampton Roads and Virginia fared well compared to many states in the early months of the pandemic, “the economic toll has been unprecedented,” the report said. In addition, the State of the Region Report noted that the return to “normal” in this region and across the United States “will likely involve masks, temperature checks and discussions of therapeutics and vaccines for months (if not years) to come. Full recovery from COVID-19 is likely to take years.
The report suggests that seven months of COVID-19 has completely cancelled the sometimes-agonizingly slow recovery of this region from the last major economic jolt, the Great Recession of 2007-09. And the impact of this pandemic is being felt disproportionately by our minority communities, particularly African Americans and Hispanics.
Statistics and figures about labor market and consumer spending markets tell the dramatic story of COVID-19 in Hampton Roads.
In April 2020, individual employment fell by 11.6 percent. By June, 59,000 fewer residents of the region were employed, when compared to March. In April, 77,000 Hampton Roads residents filed an initial unemployment claim, seven times higher than the peak of the Great Recession. While the region’s dependence on direct federal spending (particularly through the Department of Defense) helped insulate Hampton Roads from some of the worst effects of COVID-19, the other two “pillars” of the local economy – tourism and the Port of Virginia – dramatically felt the impact of the pandemic.
Hotel occupancy in the region bottomed out at 31 percent in April, a figure dwarfed by the nearly 70 percent hotel occupancy rate 12 months prior. The timing of COVID-19 was particularly unfortunate for hotels expecting a sizable boost from the second “Something in the Water” music festival, which was ultimately cancelled for this year. Hotel occupancy rates have crept up, hitting 54.9 percent in June, but are still being significantly outpaced by 2019.
Import tonnage at the Port of Virginia has declined 17.3 percent between June 2019 and June 2020. Just as troubling was the Port’s continued trend of losing market share of the goods entering and leaving the country via its East Coast ports. The Port of Virginia share of the cargo market dropped from 16.5 to 16.2 percent when comparing the first five months of 2019 to the same time interval in 2020.
As a final, sobering thought, McNab noted that in Hampton Roads, full employment recovery from the Great Recession took 100 months, nearly a decade. For that reason, he suggested the region temper expectations of a quick recovery from COVID-19, or even what post-pandemic life will look like.
Dr. Barbara Blake, Chief Administrative Officer of Old Dominion University’s Dragas Center for Economic Analysis and Policy, then led the audience through a presentation on Food Insecurity and Youth Anxiety, and Mental Health Struggles. These are issues that are impacting the region that are often overlooked and not discusses. The estimated $1 billion in lost productivity and health care expenses traced to mental health issues in 2019 is projected to soar this year due to the stress COVID-19 is bringing to our households. “As for Food Insecurity, One in 10 residents of the region were unsure of the source of their next meal in 2018. How are programs and food banks helping this region cope?” asked Dr. Blake.
When the presentation concluded, Bryan K. Stephens asked the keynote speakers what they think the best-case scenario is for the economic bounce-back once a vaccine is widely distributed. “I believe if everything goes well, then 2021 mid-summer and into fall will hopefully look more normal” answered Dr. McNab.
“One of the best things we can do for ourselves is to redefine what our normal is. It doesn’t help to look back at huge events last year like the Super Bowl and trying to quickly get back to that point. Resetting our expectation and understanding the stress this is having on the community” ended Dr. McNab.
The Hampton Roads Chamber is unapologetically pro-business and committed to pivoting towards the positive. We work year-round to be a Powerful Economic Partner by bringing our members and the business community events, like the State of the Region, to help them succeed. Thank you to our sponsors, Optima Health, Clark Nexsen, Old Point National Bank, The Port of Virginia, Crenshaw, Ware & Martin, PLC, and Palladium. Without your support, this event would not be possible.