ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, June 8, 1996 TAG: 9606090020
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
Indicators of regional job growth plummeted in April, a sign that the economic slowdown some have predicted elsewhere may have hit the Roanoke Valley.
The Virginia Employment Commission said Friday a long-running trend of robust job growth nearly ground to a halt in the Roanoke Valley.
After all new jobs and layoffs were taken into account, the region gained 300 jobs between April 1995 and April 1996. By comparison, the region gained 5,500 jobs between April 1994 and April 1995.
It's unclear if the region's economic health is on the skids or merely suffering from a touch of flu. May data due to be released in about a month should provide a better diagnosis.
Bill Mezger, senior VEC economist, blamed the drop in job creation on national and regional factors, none at this point serious enough to give local businesses reason for worry.
Mezger said interest rate increases by the Federal Reserve have dampened growth of the national economy for some time. Western Virginia was unable to escape the effects of that trend.
"This is apparently where the Federal Reserve wants us to be," he said.
The state's health care industry is hiring at a slower pace, and the effect is more pronounced here than elsewhere, the VEC said.
But there are regional factors, too, most notably a downturn in business service jobs, such as those at temporary firms. A statistical category for business, engineering and management was down by 1,300 jobs in April from a year earlier.
Another explanation is that the regional economic expansion that followed the 1990 recession may be burning out. "You may be at the point where you are about to run out of people to fill the jobs," Mezger said.
The VEC said the region had 2.5 percent unemployment in April, the eighth lowest rate of 276 metro areas in the nation. A rate below 5 percent is considered by economists to represent full employment, meaning basically everyone who wants to work can find a job.
The jobless rate can remain low even as job growth stagnates, if there is no increase in the number of people working and the number of unemployed people who are looking for work. That's the case in the Roanoke region, Mezger said.
A separate report Friday by the Labor Department contradicted the notion of weakness in the nation's job supply. The report said twice as many jobs were created in May as analysts expected.
Beth Doughty, executive director of the Roanoke Valley Economic Development Partnership, said she needs several more months' data to be convinced the expansion has slowed or stopped. By then, according to current plans, a number of companies that are new to the area may be hiring their work forces.
"So far, four new companies that have announced [expansions or new plants] this year represent more than 600 new jobs right there," Doughty said.
LENGTH: Medium: 60 lines ILLUSTRATION: GRAPHIC: Charts by staff: Unemployment rates. 1. Roanoke area.by CNB2. New River Valley area. 3. State Metro areas.