According to the latest forecast from the West Virginia University Bureau of Business and Economic Research (BBER), the state economy is expected to continue growing next year although mining and construction employment growth will slow significantly.

The latest forecast was issued at the 13th annual West Virginia Economic Outlook conference in Charleston Wednesday, Nov. 15.

The state added 7,500 jobs last year,said George W. Hammond, Ph.D., research associate professor in the WVU College of Business and Economics.This job growth was accompanied by both income and population gains, as well as an unemployment rate near the national average.

Both mining (coal, oil and gas extraction) and construction have contributed to overall job gains in the state during the past year, boosting job gains posted by the service-providing sectors. Manufacturing employment has continued to decline with losses concentrated in chemical products, glass products and primary metals (steel).

The state economy will continue to expand next year although at a slower pace, in part, because mining and construction job growth is forecast to slow,Hammond predicts.I expect job growth to be fastest in service-providing sectors, but the goods-producing sector will contribute as well.

Within the goods-producing sector, construction job growth will decelerate as residential construction activity slows in response to rising mortgage interest rates, the forecast shows. Coal mining jobs are forecast to stabilize between 17,000 and 19,000 jobs during the next five years, as coal production hits 159 million tons before stabilizing at 156 million tons by the end of the forecast. Manufacturing employment will continue to fall during the next five years although at a significantly reduced rate compared to the first half of the decade.

As usual for both the state and the nation, most of the job gains during the next five years come in service-providing sectors, primarily health care; professional and business services; leisure and hospitality; trade, transportation and utilities; government; and other services (haircuts, laundry and membership organizations).

Job growth in professional and business services reflects, in part, development of high-technology sectors in the state. Leisure and hospitality will continue to add jobs, reflecting development of the tourism sector. Health care will continue to expand in the state at about the national rate. Growth in retail trade and government will continue during the last half of the decade but at rates below the national average.

Although state incomes will rise during the forecast period, the rate of growth will be relatively slow, the study predicts. This causes the per capita personal income gap with the nation to expand from 24.5 percent in 2005 to 26.5 percent by 2011.

Overall, the state is not likely to make much progress in closing the income gap with the nation during the forecast without fundamental changes in the states business climate, human capital levels and underlying macroeconomic growth assumptions,Hammond commented.

West Virginia added 9,414 residents during the first half of the decade with net migration driving that growth. The forecast calls for job and income growth to be below the national average during the next five years. This translates into minimal population gains during the

forecast, which brings the gradual demographic aging of the states residents into sharp focus.

The full, 50-page publication is available from the WVU BBER for $30 per copy. Contact Patricia McDade at 304-293-7831 or via email at patricia.mcdade@mail.wvu.edu for more information.