West Virginias economy is expected to start generating job growth next year for the first time since early 2001, according to an economic forecast released Wednesday (Nov. 10) by the West Virginia University Bureau of Business and Economic Research.

State jobs will grow by .6 percent per year during the next five years, well below the 1 percent rate expected for the nation and the 1.6 percent per year rate posted by the state during the 1990s, the forecast, released at the 11th annual Economic Outlook Conference in Charleston, shows.

The outlook calls for state job growth to accelerate during the 2004-2009 period, compared to the past five years. Job gains should average 4,500 jobs per year during the forecast, spurred in part by rebounding coal mining activity in response to strong demand and high spot prices. Job growth is expected to be helped along by moderating job losses in manufacturing, as continued U.S. and world growth sustains demand for goods produced in the state.

Most net job growth is forecast to come in service-providing sectors such as professional and business services, health care, leisure and hospitality, and other services,said George Hammond, director of the West Virginia Economic Outlook project in the WVU College of Business and Economics and author of the forecast.

Rebounding job growth in West Virginia, including additional high-paying coal mining jobs, contributes to growth in inflation-adjusted per capita personal income during the next five years. These gains are expected to be enough to keep the per capita personal income gap with the nation near 22 percent, far better than recent results.

Continued job and income growth are forecast to produce population stability during the next five years, as the state attracts about as many residents as it loses. This sets the stage for the state to continue posting the highest median age in the nation.

Job growth and population stability during the next five years combine to keep the state unemployment rate in the 5.3 percent range, which is close to the expected national rate,Dr. Hammond said.

Risks to the forecast include a national recession during the next five years, which would have an adverse impact on state growth. Further, significantly slower world growth has the potential to reduce current gains in materials prices, with possible adverse consequences for coal and steel. In addition, the coal sector faces regulatory risks related to air and water quality.

Finally, the business services sector faces pressure from international competition for call center activity, while the gaming sector will likely face increasing competition from establishments in Pennsylvania and possibly Maryland.