NORFOLK — There were several positive takeaways in Old Dominion University’s ninth annual State of the Commonwealth Report, but it also raised questions about the commonwealth’s future.
This year’s edition showed Virginia’s economy and population have continued to grow, and a record number of people were employed and in the labor force, surpassing pre-pandemic levels. But, economic growth lagged behind Virginia’s neighbors to the south, and more of its residents are moving to other states.
In addition, Virginia’s economy did not outpace the nation’s, with much of the commonwealth’s economic growth concentrated along the I-95 corridor between Richmond and Northern Virginia.
For more than two decades, the Dragas Center for Economic Analysis and Policy, part of Strome College of Business, has produced research reports as a service to decision-makers and thought leaders in Hampton Roads, according to the University.
“The Virginia economy should grow in 2024, but work remains to be done to match the economic performance of our peers,” said Robert M. McNab, director of the Dragas Center and lead author of the report.
McNab said that data from regional labor markets illustrates the sluggishness of Virginia’s economic performance compared to other Southern states. Richmond (5.9%) and Hampton Roads (1.2%) both grew slower than the metropolitan areas of Raleigh, North Carolina (9.9%), Charleston, South Carolina (10.2%), and Jacksonville, Florida (10.9%).
Meanwhile, nearly 24,000 more people left Virginia than moved to the commonwealth in 2023, a level not observed since 2015.
“Slowing population growth (or an outright decline in the resident population) may be a warning sign about a state’s future economic prospects as residents may be ‘voting with their feet’ and seeking improved economic opportunities elsewhere in the country,” the report reads.
Despite a record 4.6 million people in the labor force in October — about 300,000 more than in February 2020 — Virginia had more job openings this past year than it did unemployed people. In September, approximately 100,000 Virginians quit their jobs and about 117,000 were unemployed. In the same month, employers reported around 263,000 job openings.
“While this is not a problem unique to the commonwealth, we need to move forward with policies to improve labor force participation,” McNab said.
After outpacing the nation’s growth in 2022, Virginia failed to repeat in 2023. The report also suggests that the returns from federal spending — which increased again in 2023 — were muted compared to previous decades.
McNab said the report provides an opportunity to find solutions to the challenges that lay ahead.
“As we enter 2024, we should think about how the commonwealth can grow in the long run,” he said.
McNab suggested that includes:
- Ensuring that Virginia’s college graduates have the skills to meet the needs of employers.
- Investing in mental health, childcare and health insurance to improve labor force participation and quality of life.
- Addressing the opioid crisis and the lingering impacts of the pandemic on student learning.
- Putting money into infrastructure projects that promote growth across the state.
You can find the full report, as well as previous State of the Commonwealth reports, here.
