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February 13, 2013

Lawmakers look at state’s economic future

By Mannix Porterfield Register-Herald Reporter

CHARLESTON — Job creation in West Virginia is expected to grow at a small pace over the next five years, but those working are likely to pull down somewhat bigger paychecks, a special report indicated Wednesday.

Lawmakers took a journey into the economic future, courtesy of the College of Business and Economics at West Virginia University, hours before the 2013 Legislative session began.

Dr. Paul Speaker, associate professor at WVU, told the Joint Committee on Finance that employment should rise an average of 1.2 percent through 2017, while salaries climb by 1.3 percent.

“We’re not expecting any real bumps upward,” he said.

Coal enjoyed a boom in recent years, ranking it third overall in the state, but the outlook for that industry is hardly rosy, with a 1.7 percent average decline seen over the five-year period, Speaker said.

“We find natural resources and the utility sectors, while generating a lot of money, there are not a lot of jobs,” he said.

“But those jobs are good jobs.”

At the same time, in recent years, leisure and hospitality, ranked only ninth in overall domestic product, hasn’t been a large jobs producer.

Even so, this sector is expected to see some upward movement in the next five years, he said.

And one major contributor looming is the advent of the Summit Bechtel Family Scout Reserve complex in Fayette County for the Boy Scouts of America. A national Jamboree is planned in July.

“We don’t know all the surprises and events that are anticipated coming up with the Summit Bechtel Boy Scouts facility,” Speaker said.

“Our projections here are perhaps a little conservative from that standpoint. These are not generally high-paying jobs. It does look like the opportunity for people to work. But as you’re looking toward what is the most attractive thing from a wage standpoint that is not going to be the final answer.”

While the nation grappled with setbacks prompted by the recession, “we saw declines not quite as dramatic in this state,” Speaker said.

And, he emphasized, much of this can be attributed to the arrival of Marcellus shale gas exploration.

In a state with an aging population, Speaker said financial services should prove to be a key part of the economic growth since retirees will need advice before moving into retirement.

“We are facing the fact that we have an older group,” he said.

“We do have some severe problems in the state, whether it be smoking, or obesity, or whatever it is you want to tack this to. The demands on our health care system are going to be rising.”

An annual growth of 2 percent is forecast in the health care sector. West Virginia is second in the country with residents 65 and older.

“We’ll have to take care of an older population,” Speaker said.

“We do have problems that need attention. It does mean more jobs.”

Speaker’s report included a projected 5.1 percent increase in construction.

“This is a big growth area,” he said, noting many jobs were forfeited in the recession.

“We expect very strong recovery here.”

Speaker prefaced his forecast with some grim statistics: last place rankings in median household income ($39,740), residents with a bachelor’s degree (17.3 percent), and size of the average household (2.43).

While no major strides can be seen in per capita income growth, Speaker said, “We’ve been closing the gap. We’ve not narrowed in on it but we are getting closer and closer to the national median. That’s going to continue.”

— E-mail: mannix@register-herald.com

 

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