Study: Hampton Roads' recovery has been plodding

We’re climbing back s-l-o-w-l-y.

Hampton Roads ranks in the bottom tier of metro areas in terms of recovery from the recession, according to a Brookings Institution report to be released today.

The area, listed as “Virginia Beach,” had placed in the top 20 of 100 metropolitan regions in Brookings’ quarterly reports as recently as June 2010. The December report put Hampton Roads among “the 20 weakest-performing metro areas” based on rebounding economies. That bottom group also includes Richmond and Greensboro, N.C.

“You were cushioned from the worst impact of the recession by having a lot of government and military jobs, but you’ve been very slow to recover,” said Howard Wial, a fellow at the Washington think tank who co-wrote the report, on Wednesday.

Hampton Roads and its ranking have suffered from rising unemployment rates and drooping housing prices, Wial said.

Peter Shaw, a professor of business and economics at Tidewater Community College, cautioned that the Brookings report “is not saying that we have the weakest overall economy. It just says the rate-of-change numbers are not looking good for us.”

For instance, the region’s unemployment rate as of September was 7.3 percent, which ranked 23rd-best in the report. But the rate rose 0.2 percentage points over the previous 12 months. So in terms of the change in the rate, Hampton Roads came in at No. 84. The jobless rate for all 100 regions averaged a decline of 0.5 percentage points.

The Brookings report tracks data through September. The region’s unemployment dropped to 7.0 percent in October, the last month for which data are available.

Wial noted two other factors that contributed to the region’s poor showing:

- “Your housing market hasn’t even started to recover,” he said. “In most places, housing prices hit bottom in the second quarter of this year and started to recover.”

Housing prices in Hampton Roads declined 11 percent since September 2010, compared with a 9 percent average decline for the 100 areas, the study said. That placed the region at No. 81.

The Real Estate Information Network, a local listing service, reported this week that the region’s median home price was $181,500 last month, up slightly from October but down 11.6 percent from a year ago.

- The “gross metropolitan product,” defined as “the total value of goods and services produced,” has risen more slowly in Hampton Roads than in most regions.

Like other economists, Wial noted the region’s reliance on military and government employment.

“You actually gained government jobs” since the low point of the recession, he said. But “looking forward, if we’re going to be in a period of federal government cutbacks – which, unfortunately, is looking that way – that doesn’t bode well for your region’s economy.”

Hampton Roads lost jobs in manufacturing but gained them in transportation and warehousing since the region hits its economic bottom, he said.

The quarterly study, known as the MetroMonitor report, assigns rankings in various categories but does not give overall ratings to regions. In the last report, issued in September, Hampton Roads ranked in the middle 20 areas. Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com