By Bill Byrd
Times West Virginian
FAIRMONT
December 23, 2007 01:56 am
—
When historians look back at the turn of the 21st Century, the economic growth in Monongalia and Preston counties — and to a much lesser degree along the rest of the I-79 Corridor from Morgantown to Clarksburg — promises to be one of the brighter stories in the state’s economy.
Monongalia and Preston counties, known as the Morgantown Metropolitan Statistical Area (MSA), have been the engine for growth in the corridor.
Studies by the West Virginia University Bureau of Business and Economic Research (BBER) on the region’s mix of jobs, population and income continue to validate the leap forward in this decade.
The Morgantown MSA had the third-highest real gross domestic product (GDP) rate among the 10 MSAs in and surrounding the state between 2001 and 2005, according to the latest edition of the Morgantown MSA Economic Monitor.
Real GDP reflects the value of final goods and services produced by labor and property in a region.
“In 2005, GDP in the Morgantown MSA was $4.3 billion,” before inflation adjustment, said authors J. Sebastian Leguizamon and George W. Hammond. Leguizamon is a graduate research assistant. Hammond is associate director of the BBER and an associate economics professor.
The Morgantown MSA was eighth out of the 10 MSA’s with component counties in the state. But Morgantown’s GDP per worker was $61,208 in 2005, ranking it fourth in the state, they report.
“Thus, while the Morgantown (MSA) economy remains relatively small, it’s also relatively productive compared to other metropolitan areas in the state,” the article states.
Earlier this year, Hammond issued his economic forecast for the Morgantown MSA.
It said the bi-county region was “likely to post continued strong growth during the next five years,” or through 2011 and the rest of the decade.
The forecast cited positive trends in jobs, population and per capita income growth.
But the growth depends on how bad the national subprime mortgage crisis gets and whether the national economy falls into a recession in 2008, Hammond notes.
The MSA’s edge over most of the rest of the state showed up in the 2000-2006 period, according to his forecast last spring.
“The Morgantown MSA added 9,000 jobs and drove its unemployment rate down from 4.1 percent in 2001 to 3.2 percent in 2006,” the study states.
The area had an annual average job growth rate from 2001-2006 of 3.2 percent, while the state was at 0.5 percent and the nation recorded 0.7 percent. Much of the job growth was in state government jobs, which includes student workers at WVU.
The two counties also added 2,898 residents and “posted per capita personal income growth of 4.4 percent per year, well above the rate of inflation, as well as the state and national rates of growth.”
Unlike the Eastern Panhandle, the state’s other growth hot spot, growth in the Morgantown MSA is spread across several key indicators.
The growth was in jobs, income and population. Growth in the Eastern Panhandle is largely based on population increases, Hammond noted.
The concentration in government and health-care sectors helps to buffer the Morgantown MSA from the business cycle, he has also noted.
“In the long run, it boils down to a concentration of highly-educated individuals in the region. A lot of that is due to the university,” he said last week.
Monongalia County has the highest level of educational attainment in the state, also thanks to the university. Nearly a third of county residents (32.4 percent) have a bachelor’s degree. The state rate is 14.8 percent while Marion County’s rate is 16 percent.
The college graduate rate in North Central West Virginia is 19.6 percent, according to the forecast.
That makes the area attractive to certain types of employers, like Mylan Pharmaceutical, Hammond said.
The region has also avoided the worst effects of the national slump in residential real estate. The growth in housing costs in the region has slowed, but it is still on the plus side, he notes.
“After experiencing an annual average growth rate of 8.3 percent from the third quarter of 2005 to the third quarter of 2006, house price appreciation declined to 4.5 percent,” in the following year in the region.
The region’s experience is better than MSA’s in Washington, D.C., Hagerstown, Md. and Winchester, Va.. All three had “outright house price declines between the third quarter of 2006 and the third quarter of 2007,” Hammond said in a press release on his latest article in the Monitor.
“Since house price appreciation in Morgantown did not hit the same high levels, and local economic growth remains robust, the local economy is better positioned to avoid outright house price declines.”
The Morgantown MSA Economic Monitor is a quarterly production of the BBER. Clear Mountain Bank helps to support it. Copies can be found on-line at these addresses: www.bber.wvu.edu and www.clearmountainbank.com.
E-mail Bill Byrd at bbyrd@timeswv.com
Copyright © 1999-2008 cnhi, inc.