The outlook for the state economy is expected to brighten next year, according to the latest forecast from the West Virginia University Bureau of Business and Economic Research. The forecast was released today (Nov. 13) at the 10th Annual West Virginia Economic Outlook Conference in Charleston with more than 200 business leaders and policy makers in attendance.

“With national growth expected to rebound, the state should gradually start to build up momentum during 2004,”said George W. Hammond, acting director of the Bureau.

However, state growth is expected to be slow, with the forecast calling for the West Virginia to add just 2,500 jobs next year. Overall gains are expected to accelerate during the 2005-2008 period, with average job gains at 5,900 per year, which translates into annual job growth of 0.8 percent. While this represents a major improvement over the last two years, it is half of the expected rate of job growth for the nation.

The fastest growing industries during the next five years are expected to be in the service-providing sectors, like health care; leisure and hospitality; and professional and business services. These gains are likely to be partly offset by job losses in the goods-producing sectors, like coal mining and manufacturing. Within the manufacturing sector, primary metals and chemical products are expected to generate the largest job losses during the next five years.

These industries are coping with strong competitive pressures from domestic and foreign rivals. Together, they are expected to lose 600 jobs per year through 2008. In contrast, the forecast calls for transportation equipment and wood products manufacturing to begin adding jobs again during the forecast period.

Moderate job gains generate equally modest income gains during the forecast, with state growth expected to fall well below the national pace. This strongly suggests that we will see a rising income gap with the national economy in the coming years.

Further, since income and jobs are important determinants of migration, the forecast calls for the state to continue to lose more residents than it gains through migration. This, combined with the state’s negative natural increase, produces moderate net population declines of 2,600 residents per year during the forecast.

Net job growth, combined with small population declines, drives the state unemployment rate down from 6.1 percent in 2003 to 5.7 percent by the end of the forecast.

Copies of the forecast are available from the Bureau of Business and Economic Research for $30. Contact Patricia Bohon, 304-293-7831, e-mail patricia.bohon@mail.wvu.edu