Geographic Area: Virginia
Reporter: Mike LC
Our state so far seems to be holding up reasonably well compared to
surrounding areas. State government just reported a budget surplus of 54 million
with estimates just last fall of a projected shortfall of $1 billion being
predicted by some regional newspapers ( Note: there never was a deficit in state
revenues. Budget had grown at 8% per annum from 95 to 01 and the state budget
this year was 1 1/2% above previous budget. Everyone may want to check their own
state budgets for the same kind of ploys to rally the population to support
tax increases) Southside part of the state is suffering the most from loss of
jobs over the last several years due to NAFTA and the loss of textile jobs to
overseas. Altavista which is below Lynchburg, VA. has suffered in the last year
when Lane Furniture shut down and moved all manufacturing overseas. ( Remember
that when shopping for new bedroom furniture) Loss of 1500 manufacturing. jobs in a
town of 20,000.
Far SW VA seems to be doing a little better than in times past as the
price of coal has firmed up do to the increased cost of oil and NG in the last
few years but that area still has high unemployment of 10 to 15%. Mines are
having a hard time hiring younger workers even at wages of 43 to 62 thousand per.
regional paper did an article with interviews and most young people would
rather get a job in an office or retail even though the wages are a fourth.
Northern VA seems to be doing ok on the surface although there were a lots
of tech jobs lost in the last 3 years ( Motorola etc.) Of course they are
close enough to DC to pony up to the Potomac and stick a straw in DC ands suck
out any funds that are needed. Richmond area has had numerous layoffs over the
last few years but most were not large and the area has held up reasonably
well. There are quite a number of manufacturers. in the area. (Phillip Morris is the
Hampton Roads is doing well but it is loaded with military installations
which so far has covered up a lackluster retail environment and sluggish
export market. Roanoke area has a diverse manuf. base that is doing very well but
retail traffic is slow. Was at a FoodLion store the other night to get some
grub since I had been out of town for 5 weeks and store was busy (5:30 p.m.)
Counted 23 of of 24 other customers in front of me who used credit/debit card for
purchases. Out of those all but one used credit for their purchase as a debit
card transaction at this particular retailer requires the use of a pin no.
This to me is a very disturbing omen that a area that has most people
employed full time with no known looming layoffs of note the population is having
to use credit for the basic necessities. Another bad sign is the number of
check cashing and payroll advance businesses that have opened in the last year.
VA. used to have a cap on interest rates of 27% but I guess the state
legislature eliminated that recently.
On a positive note the outlook for farm output and prices looks better than
any year since 1996. Tobacco, soybeans, cotton, peanuts and corn crops are all
in peak condition with ample moisture and minimal wind damage from the
numerous spring and early summer rain and storms. Cattle prices are holding firm and
hay production is ideal with many farmers getting ready for a third cutting.
So farmer with minimal fodder will be able to buy cheaply any additional hay
they need in case of a long, hard winter.
But of course a lot of our state's fortunes in the near future will be
dependent on stable commodity prices, consumer demand nationwide because of manuf.
and continued federal expenditures. My outlook for this is dismal with
people buying food on credit, cashing their paycheck in advance and the amount of
used cars, homes for sale, the large number of yard sales and people setting up
or shopping at flea markets. In the western part of the state may hold up
best. Real estate prices did not shoot to the moon like around DC and the
majority of mortgage refinancings were not cash-outs.
So we are hanging in there pretty well for right now
Be an Economist!