When it comes to the state of Hampton Roads and the Peninsula in 2022, the reviews are mixed.
The State of the Region was presented by the Virginia Peninsula Chamber of Commerce and Dragas Center for Economic Analysis and Policy in the Strome College of Business at Old Dominion University. The director, Professor Robert McNab, said when it comes to whether Hampton Roads is headed for a recession versus a recovery, it is “headed in two directions at once.”
Unemployment is low. Wages are higher, but so is the cost of housing. The two directions are causing the region to stagnate economically, he said.
One problem is outbound migration. There are five percent fewer residents in the area since February 2020.
While the pandemic is in the background, McNab said the negative effect on mental health still plays a role, especially for children. The effects on them could last a decade, McNab said.
“The kids are not alright,” he said.
Housing affordability is a problem. According to the Department of Housing and Urban Development, cost-burdened families spend more than 30 percent of income on housing. McNab said one in three families in the region is cost-burdened. One in seven households contribute more than 50 percent of their income to housing, according to the report. Renters are the most burdened. Cost-burdened housing could hurt the area in two ways. People might leave the area for more affordable housing, and new businesses could avoid to area due to concerns about affordable housing, according to Dr. Tim Komarek, Associate Professor of Economics at ODU. He also is a fellow in the Dragas Center.
McNab said not all the news is bad. Defense spending should increase in the region next year. Still, the U.S. Navy has plans to downsize the fleet in coming years, potentially impacting the region’s shipbuilding industry. Aerial defense, such as drones with surveillance and combat capabilities, is growing.
The Port of Virginia in Norfolk is set to have another record year. The tourism and hotel industry bounced back well. The continued growth in those industries depends on the cost of fuel, interest rates and the stability of the area’s economy. Compared to rest of the commonwealth and the nation, Hampton Roads’ economic growth lagged.
McNab cited a major new project on the Peninsula with Hampton Aquaplex. The region being surrounded by water on three sides lends itself to such a place. He commended the city for its plan to offer swimming lessons to second grade Hampton students. Competitive swim meets at the Aquaplex will benefit the sports tourism industry.
Refugees have increased in the area with the help of Commonwealth Catholic Charities, McNab said. Most have settled in Newport News. Between September 2021 and February 2022, the agency helped 225 Afghans settle in the area. Refugees have unique skill sets that can contribute to the area’s economy.
Dr. Suzanne Wright, Chair of the School of Nursing at ODU, said there’s no end in sight for the area’s nursing shortage. Many nurses are leaving the profession because of stress, mostly due to the pandemic. However, there are 14 education institutions offering nursing programs that people can earn an associate’s degree up to a Ph.D.
“This could become a patient safety issue,” she said.
One profession that is overpopulated is attorneys. Once thought to be a highly paid position, attorneys in Hampton Roads saw their real incomes decline by 25 percent between 2005 and 2021. One reason is the slow growth of Hampton Roads’ economy, McNabb said.
Cooperation and action now in the face of sea-level rise and military transformation will be lead to regional economic growth.