West Virginia will continue to lose jobs through 2009, but should begin to see a rebound late next year, according to the latest forecast from West Virginia University’s College of Business and Economics released today (Nov. 11) at the 16th annual West Virginia Economic Outlook conference in Charleston.
“State jobs evaporated rapidly during the first half of 2009,” said George W. Hammond, associate director of the Bureau of Business and Economic Research. Job losses are expected to slow in the second half of 2009, with job growth not expected to rebound significantly until late 2010.
“This downturn is likely to be the worst we’ve seen since the early 1980s,” Hammond said.
State job losses were severe during early 2009, with 22,600 lost from the second quarter of 2008 to the same quarter in 2009. That translates into a 3 percent decline, which is less severe than the national decrease of 3.9 percent. Also, the state unemployment rate has nearly doubled from 4.3 percent (seasonally adjusted) in the second quarter of 2008 to 8.4 percent in the same quarter of 2009.
The forecast calls for the state to start generating jobs again during the second half of 2010 and to sustain job growth through 2014, assuming the national economy grows steadily during that period.
“State job growth is likely to be slow, about one-half the national rate, during the 2009-14 period,” Hammond said. “To put that in perspective, it is expected to take five years for the state to replace the jobs lost during the downturn.”
According to the forecast, natural resources and mining jobs will decline as the U.S. and world economies gradually emerge from the downturn. Construction employment will grow slowly as the housing correction abates. Also, manufacturing jobs will stabilize during the next five years as U.S. and world demand rebounds and the value of the U.S. dollar falls.
Most jobs are forecast to be generated in the service-producing sectors, particularly professional and business services and health care. Also expected to add jobs during the forecast are trade, transportation and utilities; leisure and hospitality; and government.
Steady job growth contributes to an increase in inflation-adjusted per capita personal income but the rate of job growth in West Virginia is expected to be slower than the national average. That suggests that the income gap with the nation will gradually rise during the forecast.
Job and income growth contribute to population gains, but they will remain very slow during the next five years, according to the forecast. A key factor is the rapid aging of the state’s population. After 2011, the early waves of the baby boom generation begin to hit age 65.
There are substantial risks to the outlook this year, including the possibility of weaker than expected national performance during 2010, the impacts of more strict environmental regulation on industrial activity, increased competitive pressures on the gaming sector and possible efforts to restrain growth in health care spending.
Full details are available in a 50-page publication available from the WVU Bureau of Business and Economic Research for $30 per copy. Contact Jamie Kiszka at 304-293-7831 or via email at Jamie.Kiszka@mail.wvu.edu for more information.
CONTACT: George W. Hammond, 304-293-7876