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Regional economy lags as ODU economists predict national, state economies will keep growing in 2024

Economist Vinod Agarwal talks about the state of the regional economy during the release of ODU’s Annual Economic Forecast for 2024. (Photo by Ryan Murphy)
Economist Vinod Agarwal talks about the state of the regional economy during the release of ODU’s Annual Economic Forecast for 2024. (Photo by Ryan Murphy)

The U.S. economy did better than predicted in 2023 and should continue growing in 2024, economists from Old Dominion University said Wednesday.

But ongoing partisan fighting over the national budget in Washington is creating a lot of uncertainty – especially for Virginia and Hampton Roads, which are heavily reliant on federal dollars.

ODU’s Annual Economic Forecast, released Wednesday, includes lots of good news. Inflation is slowing nationally and is expected to reduce even further over the next year.

“We'll see positive job growth, lower inflation, relatively robust growth for the United States, lower interest rates, lower mortgage rates … and Virginia will grow as well,” ODU economist Bob McNab told an audience at the Ted Constant Convocation Center.

McNab said the rosy prediction of economic growth should hold true unless something major changes – like if the conflict in the Middle East heats up further.

Capitol Hill gridlock on the federal budget is feeding uncertainty, McNab said.

“If we can move past our own dysfunction, essentially get out of our own way, then I would argue we're set for growth in 2024 - slower than 2023, but still robust compared to pre-COVID times,” McNab said.

As for Hampton Roads, the 2024 forecast hits many of the same points as other recent ODU economic reports: namely, that the region continues to lag behind the state and comparable metro areas.

Perhaps the most important measure is employment. The region is still struggling to regain the jobs it lost during the Covid-19 pandemic, most acutely in retail and local government.

ODU economist Vinod Agarwal pointed to the growth in comparable metros like Raleigh and Jacksonville which have rocketed past their pre-pandemic jobs numbers by double-digit percentage points.

“We obviously have a problem. We are simply not creating that many jobs,” Agarwal said.

The principal reason for that, Agarwal said, is the perennial lack of regional cooperation among Hampton Roads’ localities. That’s been improving over the last couple of years, he said, but inter-city competition is still creating a drag on the region’s overall economy.

The defense, shipbuilding and shipping industries continue to be the brightest lights of the regional economy. Growth in those sectors are expected to continue in 2024.

One of the rare areas where Hampton Roads is outperforming the rest of the state is  hotels. 

The hospitality industry has been booming locally since it bounced back from the pandemic. That’s mainly because local hotels cater to vacationing tourists and not business travelers, who have dramatically cut back on trips after a rise in virtual meetings.

Housing prices will continue to be a sore point for Hampton Roads in the coming year.

The explosive increase in prices the area saw during the pandemic has slowed down considerably, but home values will continue to rise throughout this year.

The median home price in Hampton Roads reached $317,450 in 2023. That's 35% more than the median price in 2019.

Ryan is WHRO’s business and growth reporter. He joined the newsroom in 2021 after eight years at local newspapers, the Daily Press and Virginian-Pilot. Ryan is a Chesapeake native and still tries to hold his breath every time he drives through the Hampton Roads Bridge-Tunnel.

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