THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, July 16, 1996 TAG: 9607160305
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: 35 lines
If you've heard the term ``economic stagnation'' but weren't quite sure what it meant, look around. Hampton Roads is living it.
For the fourth month in a row, the Hampton Roads Economic Performance Index has failed to move. And David G. Garraty, the Virginia Wesleyan College economics professor who reports the index, says the next time the index does move it will probably be down.
``I'm getting increasingly pessimistic about the second half of the year,'' Garraty said. ``I think we may see negative numbers.''
The index registered 105.2 in May, the same thing it rang up in February, March and April. The economic performance index is based on seasonally adjusted employment data and is measured against a base of 100 points.
The problem with the region's economy this year is that it may have peaked. The service sector, which accounts for 29 percent of the region's jobs, has in the past expanded enough to make up for job losses in manufacturing - namely the shipyards - and government.
Now, service-sector employment is slowing down, with jobs growing by only 1.2 percent over the past year. Complicating that, the construction industry has started turning in negative numbers.
``There were two negatives; now I see three,'' Garraty said. ``First manufacturing and government, now construction has gone south.''
Although the 3.1 million people employed in Virginia is a record, Garraty points out that the rate at which the state is adding jobs has slowed. The rate of job growth has to keep expanding for the economy to remain healthy, he said, because the population is increasing.
``If the economy turns sour, there will be less opportunity for jobs,'' he said. by CNB