NORFOLK, Va. (WAVY) — Hampton Roads’ economy is strong and is poised for a fourth-straight year of growth, according to the 25th annual State of the Region report from Old Dominion University’s Dragas Center for Economic Analysis and Policy, which was released Tuesday.
On average, the region is growing faster than at any time over the past 15 years, with 2023 wages higher than before the COVID-19 pandemic, more people employed that ever before in the civilian workforce and inflation dropping from 9% in 2022 to less than 3% this summer. The report states that trend, along with falling interest rates, will continue into 2025.
“The region’s economic engine has picked up speed,” said Robert M. McNab, director of the Dragas Center and lead author of the report, presented at the Norfolk Waterside Marriott.
The report noted some less-than-ideal economic conditions, however, with residents leaving to seek better job opportunities, and negative consumer perception of the cost of housing, goods and groceries.
“We are poised for growth in 2025,” McNab said. “That is a seismic change in terms of how the economy is performing in Hampton Roads. It’s not a minor change. It’s moving up more than 150 points in terms of the rankings of Hampton Roads relative to other metro areas.”
It’s mostly good news, though, when it comes to the region’s ‘three pillars’ — defense, the Port of Virginia and the hospitality and tourism industry.
Defense spending locally topped $28 billion in 2023 and is expected to reach more than $30 billion by 2030.
But even as the Port of Virginia outperformed most other ports on the East Coast, according to the report, the amount of cargo moving through it wend down due to lower consumer and producer demand for imports. The port, though, has invested in improvements and is primed for future expansion, the report states.
“We were able to compete for cargo with all the other ports,” said Vinod Agarwal, economics professor and deputy director of the Dragas Center for Economic Analysis and Policy. “Investment in the port is paying off and the port has become efficient.”
And while the hospitality and tourism industry outperformed markets in Virginia and the U.S., the report noted the increase in housing costs due to a 15-year construction deficit, with home prices in the region up 56% from 2015. It said many are housing-cost-burdened, spending more than 30% of wages on a mortgage or rent.
The report said, however, that localities could improve the housing market by making changes to regulations to make building them in Hampton Roads easier for developers. It said building any type of housing influences the overall market and puts the responsibility on cities and counties to make needed changes to fix the housing shortage.
The report also discussed public libraries, the aging populations and disability rates.
To view the complete report, see below: