The Times West Virginian

Business

December 16, 2012

Forecast: State’s economy positioned to see some positive movement

FAIRMONT — West Virginia’s economy is positioned to see some positive movement in the near future.

The West Virginia University College of Business and Economics’ Bureau of Business and Economic Research (BBER) recently published its 2013 West Virginia Economic Outlook.

The report was released during the 19th annual West Virginia Economic Outlook Conference, held in Charleston on Nov. 15. It features state, national and global forecasts as well as a profile of West Virginia and information on specific industries.

The BBER is charged to create this outlook and has been providing this service for a very long time, said Dr. Paul Speaker, associate professor of finance and adjunct professor for the Department of Economics.

“One of the key missions of WVU is to serve the state particularly in an economic development capacity,” he said.

Over the last several years, the forecast has become more sophistocated. In addition to continuing this practice at the statewide level, the BBER also takes a closer look at some of the regional economies in West Virginia, Speaker said.

He said approximately 200 individuals from different fields attended the recent West Virginia Economic Outlook Conference. These participants included government policymakers and business leaders from across the state who rely on the forecast for planning and to make sure they’re best prepared for what’s to come. Educators and people generally interested in the economic situation were also there, Speaker said.

The BBER also provided its outlook for the Eastern Panhandle during presentations in Martinsburg and Berkeley Springs in November, and an Economic Outlook Conference will be held for North Central West Virginia in the coming months, he said. These regional meetings usually draw many small businesses and bankers.

“We saw a tremendous year last year in the energy sector,” Speaker said of the state as a whole. “It’s been the opposite in 2012 as we’ve seen things really fall off dramatically in coal, and with natural gas prices going down so low there’s been less activity.”

He said the BBER expects to see a slight retraction in the energy sector over the next five years, which is of great interest to West Virginians.

Several of the professional fields should see huge growth opportunities, including financial services such as helping to manage retirement accounts, non-financial services like attorneys, and health care.

The growth in health care is positive from the standpoint of creating new jobs and services statewide, but negative because it is necessitated by the obesity and smoking rates and an aging population that needs more care, Speaker said.

Other high-paying jobs will continue to be developed across West Virginia, particularly in the high-growth areas in the northern part of the state and the Eastern Panhandle, he said.

“The Eastern Panhandle is a group that we believe is going to do better than the nation,” Speaker said. “North Central West Virginia, our region, is another one that we view as going to do quite well.”

The North Central area should surpass the state in job growth, and be close to if not better than the national average in the future. However, the most southern counties aren’t expected to perform anywhere near the national or state average, he said

Speaker said the Summit Bechtel Family National Scout Reserve, which will be built in Mount Hope, W.Va., should bring many jobs to the state in construction, hospitality/tourism and recreation. There should be growth in terms of additional hotels and restaurants, and this venue could also create educational and leadership opportunities.

“As we begin to discover the other uses of that facility, this is a tremendous development,” he said. “I think it’s nothing but great news for the central part of the state.”

While the state is expected to experience modest job growth, that positive movement might not be as rapid as people would like. Much of the growth depends on what happens at the national level in terms of “fiscal cliff” talks, Speaker said.

If Congress comes to an agreement before the end of the month, the economy will likely be considerably better than what the BBER projected. But if lawmakers continue to argue, that could lead to a slowdown, he said.

Speaker said the BBER has forecast steady declines in unemployment, with the rate going down to about 5.7 percent by the end of a five-year period.

“It’s kind of slow and steady,” he said. “Very good news.”

West Virginia is currently significantly below the national average in terms of household income levels. But the BBER anticipates that the state will see improvements and narrow that gap over the next five years, and show a little better growth than nationwide, Speaker said.

Email Jessica Borders at jborders@timeswv.com or follow her on Twitter @JBordersTWV.

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