ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Tuesday, February 11, 1997 TAG: 9702110057
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
Western Virginia is in a "gradual economic decline" because of more than two decades of manufacturing job cuts, according to a study.
The report, a look at 25-year trends in the region's economy, may offer insight to the economic malaise that lingers despite the strong economy. The report says that while manufacturing work has declined across the state and nation from 1985 to 1994, it fell more sharply in this area.
However, per-person income in Roanoke, Salem and Roanoke and Botetourt counties grew slightly faster than in the state or nation. That goes for job-related earnings, investment income and government transfers.
The region's economy is "not in terrible shape - there are worse places, I can assure you - but it's not strong," said the report's author, William Fruth of Jupiter, Fla.
The New Century Council is tackling projects to improve the economy and quality of life in 11 counties and five cities in the Roanoke and New River valleys and Alleghany Highlands, including Bland and Wythe counties. The council commissioned the report from a national study to get a big-picture look at important economic trends. The regional report cost $5,000.
Council officials are concerned that record low-unemployment rates may create false security. That rate in December was 2.5 percent, the Virginia Employment Commission said Monday. That's half the national jobless rate and nearly two points below the state rate. For all of 1996, the jobless rate averaged 2.8 percent, half that for 1992, according to the VEC's preliminary figures.
"The old perception of the economy here is it's been pretty good, and I think it is pretty good," said Jim Rakes, co-chairman of the New Century Council and president of the National Bank of Blacksburg. But a deeper analysis is called for, he said. "What we intended to do was to get a nationally recognized consulting firm to put in perspective where we are."
The report should spark action among those in the community who need a push to work on economic problems and encourage those already involved, said Rakes, who noted that the council has set a goal of building an industrial park in Pulaski County.
The findings included:
* The metro area of Roanoke, Salem and Roanoke and Botetourt counties ranked 164th of 313 metro areas in terms of economic strength. On the consultant's report card, that translated to a C+ for the Roanoke area. Five of the seven other metros in Virginia scored higher, with the one encompassing Washington, D.C., scoring 8th nationally and receiving an A+.
* Between 1985 and 1994, manufacturing employment dipped an annual average of 0.83 percent in the U.S. metro areas and 0.53 percent in Virginia metros, but dropped 1.07 percent in the Roanoke metro. Outside the metros, the counties of Alleghany, Craig, Floyd, Giles, Montgomery and Pulaski lagged behind state and national averages. Individual communities, such as Botetourt and Bland counties, were exceptions.
* Between 1985 and 1994, per-person income grew at 5.5 percent in the Roanoke metro, compared with about 5 percent in the state and nation. Outside the urban center, income grew at a rate slightly below the average for rural areas in the state and nation.
Bill Mezger, employment commission economist, faulted the report for downplaying the Roanoke region's large number of service jobs in health care, distribution and retailing.
"I would say [the grade should be] more like a B," Mezger said. The New River Valley's economy is slightly weaker than the Roanoke Valley's, Mezger said.
The top official in charge of bringing jobs to the Roanoke Valley said the valley's job growth from 1992 to 1995 was a bright spot in Virginia. "The state trumpets what's going on here," said Beth Doughty, who directs the Roanoke Valley Economic Development Partnership.
The report "is not all bad news," said John Williamson, a council co-chairman and vice president for rates at Roanoke Gas Co. In addition, the report's figures predate decisions by a number of new industries in 1996 for launching plants or offices in the Roanoke area, he said.
LENGTH: Medium: 78 lines ILLUSTRATION: GRAPHIC: Chart by staff: Unemployment rates. color. KEYWORDS: MGRby CNB