
NORFOLK — A new State of the Commonwealth report by Old Dominion University finds Virginia had a strong year in 2024. But researchers say challenges remain.
The report finds housing will be a major issue in the state, as local governments work to address housing shortages and zoning laws.
Virginia had its fourth straight year of economic growth in 2024, ranking as the number one state to do business.
Bob McNab, professor of economics at Old Dominion University, said the overall outlook for Virginia in 2025 is positive. But he said a number of factors may impact that forecast.
“We saw inflation decelerate, real wages — that’s wages after inflation — rise, jobs continue to increase,” said McNab. “As Virginia enters 2025, it is in a good position to continue growth.”
McNab did warn that international trade, immigration, and the status of the federal workforce could impact Virginia’s economy.
Despite data that points to a strong economy, consumers aren’t quick to agree.
The report finds consumers still feel less optimistic about the state of the economy than before the COVID-19 pandemic.
Higher prices on goods and services because of inflation have driven that sentiment. McNab said people interact with prices daily — and their paycheck may be once or twice a month.
That, he said, leads to the data not coinciding with consumer feelings on the economy.
“And since 2019, real hourly earnings have increased after accounting for inflation,” said McNab. “People’s wages have outgained inflation. But they don’t feel like that has occurred because they see prices much more frequently.”
The report also finds Virginia’s unemployment rate is nearing record lows.