
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, March 5, 1991                   TAG: 9103050135
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

NO VA. TURNAROUND IN VIEW/ TWO REPORTS NOTE STATE'S DECLINE; ONE SEES NO NEW

Two new economic reports have registered Virginia's economic downturn late last year. One of them said there is little hope for a turnaround this year.

Declines in employment, building-permit values and the average factory work week in 1990's fourth quarter, plus an increase in new claims for unemployment benefits, pulled Virginia's economic level down in the First Wachovia Southeast Business Index.

The index prepared by the banking company based in Atlanta and Winston-Salem, N.C., showed Virginia's economy declining 0.7 percent from the preceding quarter and 0.5 percent in the past year.

The index, which measures economic indicators in 13 southeastern states and the District of Columbia, dropped 0.6 percent from the preceding quarter but advanced 0.3 percent from a year earlier.

Virginia's gain of 1.5 percent in employment - about 43,000 jobs in the past year - ranked in the upper half of states, but was slightly less than the 1.7 percent average employment growth for the region.

Virginia's rapid expansion, because of government-related employment and residential development, was strong until those factors began to turn down in the second quarter, said Donald Ratajczak, a Georgia State University economist.

As construction remained slow, the service sector was nearly stalled while consumption and factory employment fell during the third quarter.

Ratajczak predicted the state's recession will worsen in 1991. He said no sector in the state is in a position for renewed strength this year.

The Georgia State overview for Virginia said average weekly hours worked declined in the third quarter for the fifth consecutive period, initial unemployment claims were 35 percent above a year earlier and "employment distress is accelerating."

Residential building permits, down for seven consecutive quarters, were 55 percent below a 1986 peak, while non-residential permits were 37 percent below a high in 1988. Retail trade employment has slowed significantly after several years of vigorous growth, the Georgia State report said.

by CNB