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WVU chief economist: West Virginia is on the rebound, but still lags behind

WVU Today

MORGANTOWN, W.Va. — West Virginia’s economy is on the rebound, but will experience relatively weak growth in the five-year economic forecast period, according to Dr. John Deskins, West Virginia University’s chief economist and director of the WVU Bureau of Business and Economic Research.

The state’s economic forecast was outlined by Deskins today (Oct. 5) at the 24th Annual West Virginia Economic Outlook Conference in Charleston to more than 200 state business leaders, policymakers and stakeholders.

“Employment in West Virginia will increase by an average 0.7 percent each year through 2022, but that lags behind the anticipated 0.9 percent annual growth expected for the U.S. as a whole,” said Deskins, who heads the BBER out of the WVU College of Business and Economics. “Total employment in West Virginia is not expected to return to the peak levels we saw in 2012 until 2021.”

Deskins said the baseline forecast sees the recent upturn in coal production and coal-related jobs coming to an end as the industry enters a period of relative stability. “The industry’s outlook remains subject to considerable downside risk due to lingering uncertainty related to coal use by domestic power plants and future global demand for thermal and met coal,” he said.

However, he pointed to positive outlooks for the natural gas, construction and manufacturing industries. “Rising domestic demand, increased LNG exports and enhancements in regional pipeline networks bode well for West Virginia’s natural gas industry during the outlook period. Overall, production and employment are expected to gain momentum over the next few years. Longer term, the emergence of downstream processing facilities in Pennsylvania, and perhaps Ohio, raise prospects for continued growth in our state,” Deskins said.

Construction and manufacturing growth are expected in the state’s economic growth centers. Residential and commercial building activity will occur in the growth regions of West Virginia, with an infusion of activity from energy- and transportation-related infrastructure projects. While manufacturing is anticipated to post gains of 0.9 percent annually over the next five years, most of that growth is projected to come from two major facilities in the Eastern Panhandle.

While West Virginia’s unemployment rate will hover in the mid-4 percent range for some time, Deskins warned that the jobless rate “provides an incomplete and potentially misleading indication of labor market conditions due to the state’s underlying demographic characteristics,” as the state has the nation’s lowest percentage of labor force participation.

West Virginia’s population has declined by more than 25,000 people since 2012, and forecast data indicated more population losses are likely over the long term due to the state’s large percentage of elderly and “the effects of poor health outcomes and behaviors for many segments of the overall population.” Deskins noted that in-migration would provide a positive shock to lessen population declines, and that a limited number of counties would actually add residents during the outlook period. Those population gains would be most heavily concentrated in North Central West Virginia and the Eastern Panhandle.

WVU’s chief economist emphasized that health and education outcomes remain major challenges for the state. “Economic development strategies should focus on ways to improve health and education outcomes in the state to make West Virginia’s workforce more attractive to potential businesses,” Deskins said.

He also pointed to the characteristics that make each of the state’s regions so different from one another, and said that policymakers should know those economic differences.

“West Virginia is a state with several different regions and several different economics,” said Deskins. “Policymakers should be keenly aware of those differences and ensure that economic development strategies consider each region’s specific strengths and weaknesses.”

The annual economic outlook conference also included the national economic outlook by Gus Faucher, chief economist for the PNC Financial Services Group; a presentation by West Virginia Commerce Secretary Woody Thrasher; and a panel discussion by a group of West Virginia business leaders about ways to enhance the state’s entrepreneurial culture.

The West Virginia Economic Outlook is available for free download by visiting

The BBER will host the following regional economic outlook conferences throughout the state in the coming weeks:

·      New River Gorge Area Economic Outlook Conference, Beckley, October 12, Tamarack

·      Wheeling Area Economic Outlook Conference, Wheeling, October 18, Wheeling Island Hotel-Casino

·      North Central West Virginia Economic Outlook Conference, Fairmont, November 8, West Virginia High Technology Foundation

·      West Virginia Eastern Panhandle Economic Outlook Conference, Martinsburg, November 15, Holiday Inn Martinsburg

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