Report: Region is among strongest economically

With its output of goods and services on the upswing, Hampton Roads continues to rank among the country's 20 strongest metro areas in economic performance, a major research center said Monday.

The Virginia Beach-Norfolk-Newport News area was one of only six in the nation that regained their peak output by the summer quarter, Brookings Institution said in its latest report on the economic health of the nation's 100 largest metro areas.

In addition, Hampton Roads' jobless rate of 6.7 percent for the July-through-September quarter was the 11th best among major metro areas, said Alan Berube, research director of the Metropolitan Policy Program at Washington-based Brookings.

"We saw manufacturing employment stabilize and even grow a little bit" in the region during the third quarter, he said.

The tax credit available to first-time home buyers and the C ash for C lunkers incentive appeared to contribute to Hampton Roads' economic growth, as they did for most metro areas, Berube said.

Earlier this year, Brookings' Metropolitan Policy Program began measuring the economic health of metro areas by focusing on changes in their employment, jobless rates, output of goods and services and housing prices. Its reports for this year's first and second quarters also included Hampton Roads among the top 20 metro areas in economic performance.

Vinod Agarwal, an economics professor at Old Dominion University and member of ODU's Economic Forecasting Project, said he had not yet seen the Brookings report but attributed part of the growth in Hampton Roads' output of goods and services to the effects of greater defense spending in the region.

In addition to the rebound in its output, job losses in Hampton Roads have been less severe than in many metro areas, the Brookings report noted. Between the summer of 2007 and this year's third quarter, employment has declined 2.2 percent in Hampton Roads while the average for the 100 largest metro areas was 4.3 percent.

Several companies have announced plans to close facilities in the region during 2010, which could generate significant job losses next year and threaten continued economic expansion. These include International Paper, which is closing its paper mill in Franklin with 1,100 workers; CooperVision Inc., which is shutting a contact-lens plant in Norfolk with 570 employees; and Verizon Wireless, which is closing a Virginia Beach call center with 400 employees.

Hampton Roads' economic performance in the third quarter compared less favorably with the metro-area averages when Brookings applied housing-market indicators. The pace of home repossessions in the region increased more rapidly than the average for the 100 largest metro areas, while local home prices fell 2 percent from the year-earlier quarter, according to the report. Among the nation's 100 largest metro areas, half have seen increases in their home prices since last year's third quarter, Berube said.

Despite the evidence of rising output in goods and services nationwide, job growth remains spotty, and the U.S. economy "still seems a long way from posting the sustained job gains that would meaningfully lower unemployment and boost incomes," the report said.

In addition to Hampton Roads, Brookings' roster of the 20 strongest metro areas includes Austin, Texas; Columbia, S.C.; Kansas City, Mo.; and Washington, D.C. A separate list of the 20 weakest regions includes Detroit; Las Vegas; Orlando, Fla.; Portland, Ore.; and San Jose, Calif.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com