Job growth in West Virginias Eastern Panhandle is expected to come to a halt the next two years before rebounding in 2010, according to the latest forecast from the West Virginia University College of Business and Economics .
The forecastpresented today (Oct. 29) at the Eastern Panhandle Economic Outlook Conference in Martinsburgincludes Berkeley, Jefferson and Morgan counties.
The Eastern Panhandle has been among the fastest-growing regions in the state so far this decade,said George W. Hammond , associate director of WVU s Bureau of Business and Economic Research .However, it is also showing signs of slowing down in response to decelerating national growth and the housing correction.
Much of the job growth slowdown originated in construction, with employment falling by 310 in 2007 and on pace to fall again in 2008. Manufacturing and professional and business services also lost jobs in 2007, while trade, transportation and utilities employment has weakened so far in 2008. Overall, employment growth has remained solid in health care, leisure and hospitality, and government.
Slowing construction employment in 2007 and 2008 mirrors declining values for residential construction starts in the region. According to data from FW Dodge, the value of residential construction starts in the region has fallen by 36.4 percent from the first eight months of 2007 to the same period in 2008.
In addition, house prices are falling in the metropolitan statistical areas (MSAs) that include the Eastern Panhandle. According to data from the Office of Federal Housing Enterprise Oversight, single-family house prices in the Washington MSA which includes Jefferson Countyhave fallen by 9.7 percent from their peak. Likewise, house prices for the Hagerstown-Martinsburg MSA which includes Berkeley and Morgan countiesare down 5.8 percent from their peak.
The housing correction and problems in the financial sector are contributing to a likely national recession in 2008-09.
For the Eastern Panhandle, the national recession translates into net job losses in 2008 and 2009, and then growth is expected to rebound during the 2010-12 period,Hammond said.
On average during the next five years, the Eastern Panhandle is forecast to generate job growth close to the national rate and above the state rate. Population growth continues but slows as job growth slows and continued high gas prices reduce the attractiveness of long commutes. The regions unemployment rate bounces up during the next two years but is forecast to remain below the national average.
The Eastern Panhandle Economic Outlook Conference was sponsored by Centra Bank. The Gateway New Economy Council and the economic development authorities of Berkeley, Jefferson and Morgan counties co-sponsored the event. Additional underwriting support was provided by the McLaughlin Economic Outlook Fund.