NORFOLK, Va. (WAVY) — Economists with Old Dominion University shared their outlook for Hampton Roads’ economy for 2018 and say they’re uncertain about what will happen.
Dr. Vinod Agarwal and Dr. Robert McNab spoke in front of a large crowd at the Norfolk Sheraton Hotel on Wednesday afternoon.
Both Agarwal and McNab say they expect slight growth for the region but believe it will remain stagnant, just like in years past.
The two economics professors say politics at national level continue to create this uncertainty because one third of our economy is tied to the federal government.
“It would be like driving your car but half the engine is operating,” McNab said.
McNab says when Congress passes continuing resolutions, instead of coming to agreement on the budget that funds the Department of Defense, it leaves businesses unprepared.
“If Congress can pass spending bills in a timely manner, then our economy growth is going to go higher. If Congress continues to disagree and pass continuing resolutions, we’ll continue to hop along,” he said.
Both professors say there’s been slight growth in our area since the recession hit in 2008 but it’s not at the level we should be seeing.
They say an area like Hampton Roads, which has many municipalities, should work together to increase jobs and growth.
“If all our politicians, business leaders are thinking we will grow together as a region, we will grow. We have everything we need,” said Dr. Agarwal.
Agarwal and McNab also expect thousands more jobs.
Unemployment is expected to be down from 4.25 percent in 2017 to 3.90 percent in 2018.
But, there’s a demand for labor that’s not being filled.
McNab says about 20 percent of those who can work aren’t, and those already working are taking better jobs with higher wages.
Agarwal says jobs continue to grow in areas like health care because people are living longer, but we’re seeing less manufacturing and construction jobs.
Both economists say the tourism business is doing well, but short term rentals such as AirBnB will cause problems for the hotel industry.
Agarwal and McNab say consumer confidence continues to boost the regional, state and national economy, but they’re afraid it won’t be able to sustain itself for much longer.
“We’re really worried in 2019 that the party’s going to end,” McNab said.
In case there is a financial crisis in the near future, McNab says now is the time to financially prepare by having money set aside.
“Make sure right now when times are good and getting better, you’re financial ship is in order in case there is a storm, you’re ready,” McNab said.