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Street Level Economics |
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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 largest).
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 |
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