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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