By Fred Pace
Register-Herald Reporter
March 22, 2008 10:33 pm
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West Virginia economist George Hammond predicted that if national economic growth slowed, West Virginia’s would slow as well.
“I think that forecast is basically on track,” Hammond said Friday.
Each November, Hammond gives his statewide economic forecast at the annual West Virginia Economic Outlook Conference in Charleston. Hammond is associate director of the Bureau of Business & Economic Research at West Virginia University’s College of Business & Economics. He is also an associate professor of economics at the school.
Despite many polls showing many Americans feel the country is already experiencing a recession, Hammond says the national economy is barely avoiding it.
“We continue tracking the state and national growth, which for West Virginia has slowed dangerously close to no growth and suggests that the state will flirt with recession,” he said.
Hammond predicts the state economy will slow significantly during the rest of the year, driven by weak growth in mining and construction, as well as slow job growth.
Two things Hammond says to keep an eye on are construction activity and energy.
“What happens with construction activity, especially in the Eastern Panhandle of the state?” Hammond said. “That part of the state experienced the best of the housing market boom and the worst of the housing market bust.”
Regarding energy, Hammond says pay particular attention to coal.
“Spot prices for coal have skyrocketed lately, basically more than doubling,” he said. “If we can rebound with an increase in coal production, there is the possibility it could somewhat buffer the state’s predicted slowdown.”
Hammond added the state’s labor force growth will stop or greatly slow as the population continues to get older.
“This will be an issue for employers,” he said.
The implications are the population losses in the younger age groups (birth-17 and 18-44) and population gains in the older age groups (45-64 and 65 and older), he said.
“The 65-and-older age group is forecast to grow the fastest during the next five years, particularly after 2010 as baby boomers begin to reach age 65,” he said. “This could mean a large number of jobs could be available for skilled workers and this could mean opportunities for graduates of the state’s higher education institutions that wish to remain in the state.”
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fpace@register-herald.com
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