Economic Forecast

The Harrisonburg-Rockingham Chamber of Commerce hosted its Economic Forecast on Thursday, February 18th at the First Presbyterian Church in Court Square. Overall, the message was uplifting compared to the bleak economic news that has resided over the nation since the start of the recession. Presenters revealed an optimistic outlook for the local economy, and even predicted that numbers would start to turn positive by the end of 2010.

State Overview
The Chamber added a new twist to the event with the addition of a statewide perspective delivered by Liz Povar, Director of Business Development for the Virginia Economic Development Partnership.  She began her presentation with a quote from Paul Volcker, the chairman of President Barack Obama's Economic Advisory Board. When asked what the economic growth will look like in 2010, Volcker responded, “economists are terrible at forecasting and it’s going to be a slog.”  

Povar emphasized that part of the journey to overcome the recession is man-made. Moving forward, it will be important to determine the areas where Virginia has the potential to be competitive. These areas of focus include biosciences, information technology, advanced manufacturing, and transportation. “These are all natural sectors for Harrisonburg and Rockingham County considering that Merck, JMU and SRI are located here,” said Povar.

The Harrisonburg area is also positioned in the best geographic location to build the renewable energy sector according to Povar. However, Virginia needs aligned incentives in order to leverage our assets. Such incentives include competitive tools such as workforce training and the ability to align our dollars with the sectors we are going after.

Local Forecast
Brian Shull, Harrisonburg's economic development director and Billy Vaughn, Rockingham County director of community development followed up Povar’s presentation with an assessment of local economic indicators, including unemployment rates and real estate trends.

The national unemployment rate was 9.7 percent. Harrisonburg and Rockingham County came in at 6.1 percent and 5.5 percent respectively. The metro area has the 26th lowest unemployment rate in the nation.

According to Vaughn, the four industry sectors that Harrisonburg and Rockingham County are focusing on to improve economic growth include healthcare, higher education, biosciences, and technology development.

Brian Shull said he expects the area’s population to grow along with job opportunities. He anticipates 1 to 2 percent employment growth by the end of 2010. He also predicts a significant rebound in new construction in the third and fourth quarters.  Virginia Economic Trends forecasts that building permits will increase 15.8% in the Harrisonburg area this year.

“At the height of the housing market boom, the city and county were averaging 1200 new building permits per year,” said Vaughn. In 2006, we started to feel the effects of the economy. By 2009, that number plunged to 771, yet there seemed to be more first-time homebuyers. This trend could be attributed to the stimulus package, which included tax credits for first-time homebuyers.

Stimulus money is also flowing to Virginia. According to recovery.gov, Virginia was awarded $4.3 billion. Forty-eight different awards, totaling more than $38 million were connected, directly or indirectly, to the Harrisonburg-Rockingham area.

The Chamber’s Economic Forecast is an annual event held in February. By hosting this event, the Chamber hopes to broaden our members’ understanding of the local, regional and state economies and the trends that impact our community. “Our intent is to continue growing the content and attendance each year, making the Chamber’s Economic Forecast one of most comprehensive economic outlook events in the region.” said Frank Tamberrino, President of the Harrisonburg-Rockingham Chamber of Commerce.