The director of West Virginia University’s Bureau of Business and Economic Research says West Virginia’s economy is moving in the right direction but still has a long way to go.
In Wednesday’s Joint Standing Committee on Finance, John Deskins, director of WVU’s Bureau of Business and Economic Research, presented the 2019-2023 West Virginia Economic outlook.
After the state lost more than 26,000 jobs between 2012 and 2016, West Virginia has added 7,000 jobs, according to the report.
“We are moving in the right direction but we still have a long way to go to get back to where we were in 2012,” Deskins said.
Although other counties have added jobs, primary growth has been concentrated in eight counties— Monongalia, Marshall, Harrison, Doddridge, Roane, Jackson, Berkeley and Jefferson. Growth has mainly been driven by energy industries.
West Virginia’s Gross Domestic Product – which measures the total value of goods produced and services provided – grew in 2017 and outpaced 40 other states, according to the report. This growth was driven by energy-related industries.
The state’s unemployment rate has increased over the past year and currently stands in the low 5 percent range. The increase has been driven by more individuals returning to the labor market to look for work. However, Deskins said a big concern is West Virginia’s labor force participation, which measures people who are actively looking for work. Only 53 percent of West Virginia’s population is either working or looking for work, which is the lowest rate in all 50 states.
The national rate is 63 percent. He explained this number will never be 100 percent because it accounts for the population including those who are retired or attending school.
The economy also differs by region:
- Deskins said the Southern Coal Fields are suffering the most with five counties that went through a Great Depression.
- The New River Gorge region is categorized as a stagnant area but Deskins said there is a lot of potential, especially with tourism.
- The Metro Valley is categorized as a stable region with potential in the petrochemical industry.
- North Central West Virginia is categorized as strong with a more diversified economy.
- The Eastern Panhandle also has experienced growth. Deskins said some of this growth is from D.C. commuters but he said the region also has experienced homegrown growth.
- The Shell Gas Boom Region in the Northern Panhandle has experienced good wage growth but low employment growth. He said there is potential with natural gas in keeping natural gas in the state to break into various products.
Legislators asked about how outmigration is affecting the state’s economy. Deskins said it has a “tremendous” effect. West Virginia’s population has decreased by nearly 40,000 since 2012, according to the report, and is estimated to continue to lose population in the next five years.
Deskins said the state needs to diversify its economy and focus on fostering a conducive environment for entrepreneurs.
“Entrepreneurship is essential,” he said. “Most people who start a business this year will not be running that business next year. But the ones who do find success—that’s how you find the right industrial mix.”
“The conclusion is there should never be an economic development discussion that doesn’t somehow include the question of what we can do to create, foster, and support an environment more conducive to entrepreneurship.”
