Region ranks low for growth in 2011

Hampton Roads ranked No. 159 out of the world's 200 largest metropolitan areas in economic growth last year, according to a Brookings Institution report to be released today. A co-author of the study blamed the region's low ranking on cutbacks in government employment.

The region's position was slightly better than its No. 163 ranking in 2010, but far below its 104 slot for the 2007-10 period, according to Brookings, a Washington think tank.

Among 57 U.S. areas that were surveyed, Hampton Roads landed in the bottom third, though it bested 14 other regions, including Denver (No. 174), Atlanta (189) and Richmond (191).

Alan Berube, a senior fellow and co-author of the report, noted that it measured economic growth and not overall performance. "If the recession wasn't as bad in the Virginia Beach area," he said, "not growing as quickly coming out of the recession is not as terrible.

"It would be more terrible if Detroit were growing as slowly as Virginia Beach is right now, because it was so severely affected by the recession," Berube said. Detroit ranked No. 72 in 2011.

James Koch, an economics professor and former president at Old Dominion University, agreed that "this isn't something I would go into much of a panic about at all."

During the recession and the first phase of the recovery, Berube said, "metropolitan areas more focused in industries less susceptible to a drop in demand - government, education, health care - did not feel the recession quite as badly as the others did."

Areas such as Hampton Roads "that rely more on government spending and employment are suffering because governments are suffering now," he said.

The Global MetroMonitor report considers two factors - income and employment.

The region, listed as "Virginia Beach," recorded a 1.2 percent increase in average income, which "is back to its pre-recession value," Berube said. The area ranked 40th in per-capita income overall last year. However, it suffered a 0.2 percent drop in the number of jobs - totaling about 2,000 - since 2010, Berube said.

In addition, real estate's slide has hurt Hampton Roads, he said. "Real estate still makes up a pretty large share of what the regional economy does, probably too large a share."

Koch also noted local weaknesses in two industries - the port and tourism, particularly near Williamsburg.

"Our port has not recovered to the extent that most of the other ports along the Eastern Coast have," Koch said. "The port and tourism are almost 20 percent of our economy. Since they're not going terribly well, I think that has tended to depress our growth."

Only three U.S. cities made the report's top 50 list - Houston (No. 19), Dallas (36) and Rochester, N.Y. (46). The two fastest-growing areas in the world, Brookings said, are Shanghai and Riyadh, Saudi Arabia.

"I think it's a reflection of the fact that these are wealthier, more productive places to begin with," Berube said of U.S. cities. "The growth that you're seeing in emerging marketplaces - they're starting at a lower place."

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com