New report: Virginia experienced economic growth in 2023
Old Dominion University has released its annual State of the Commonwealth report. Virginia saw economic growth this year, but Virginians are still feeling pessimistic.
Many economic prognosticators thought 2023 would bring a recession – but those fears were largely unfounded.
In fact, Virginia saw economic growth this year – even if it was slower than some states to our south.
Bob McNab, who oversaw work on the report, says it shows a significant disconnect.
“Virginia has a record number of people in the labor force, a record number of people employed, median incomes are up, the state has gained population," he says. "And yet, consumers say, ‘Yeah, this is worse than the Great Recession of 2007-2009.’”
And the good news isn’t just at the consumer level either. Tax revenues in Virginia continue to be robust – so much so that rebates went out to Virginians a few months ago.
McNab says that disconnect will have a big impact on how 2024 goes for the Commonwealth.
“Will we see consumers feeling bad about the economy result in changing their behavior and thus the economy becomes worse," he wonders. "Or, do people look around and say, ‘We’re out of this sustained bout of inflation, things appear to be getting better – maybe things aren’t as bad as they seem?’”
McNab adds there are things Virginia can do to boost economic growth in the future – including more investments in mental health, childcare and infrastructure across the state.
Despite some economic growth in 2023, one area remains a sore spot for Virginians — real estate.
McNab says high prices and low inventory really comes down to a supply problem.
“We’ve never recovered to the levels of building single-family homes and multi-family apartments and condominiums that we had prior to the Great Recession," he says. "So, we’ve been building less shelter for 15 years. At the same time, Virginia’s population has been growing.”
McNab doesn’t expect home prices to come down any time soon. He says solutions could look like mixed-use or even workforce housing – but the problem will require effort at the local and state level.