THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Tuesday, November 1, 1994 TAG: 9411010263
SECTION: BUSINESS PAGE: D01 EDITION: FINAL
SOURCE: By MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 75 lines
Well, at least we're not last.
But No. 30 isn't much better.
That's where Virginia, reeling from defense cuts, landed in U.S. News & World Report magazine's latest survey of the 50 states' economies.
According to the national publication, which looks at each state since the beginning of the recession's recovery, Virginia is still smarting from defense cuts. Peninsula employer Newport News Shipbuilding received mention by name in the state's section for its deep cuts in its work force.
On a positive note, ``what's been added has been service jobs,'' said Warren Cohen, a U.S. News reporter who covered Virginia for the survey. ``Tourism is doing really well but those jobs don't pay as well as higher-paid manufacturing jobs.'' Per capita wages and unemployment rates dragged the state down as well, he said.
Last year, Virginia ranked No. 42, but its retail sales, which ranked seventh among the 50 states, probably helped the state climb in the rankings this year, Cohen said.
Virginia rated favorably in comparison with neighbors Maryland, South Carolina and West Virginia. The magazine's survey reinforced a University of Baltimore study released last week saying that Maryland lags behind Virginia in its economic recovery.
The state could not compete with North Carolina, ranked 18th, and Tennessee, ranked 16th.
``North Carolina is one of the fastest growing states'' in the nation, Cohen said. ``As far as the other ones in the region, it (Virginia) is doing fairly well.''
Local economists agreed with U.S. News' assessment of the Old Dominion.
``We have, for about 15 years, been experiencing what people refer to as a bicoastal economy,'' said John Whaley, an economist with the Hampton Roads Planning District Commission. ``In the Reagan years, both coasts prospered from the increase in defense spending, so that was the positive side of the bicoastal economy. Since 1987, defense cuts have been with us and both coasts have suffered. Both coasts in this country are doing worse than the heartland, and we had the reverse during the 1980s.''
The news magazine rated Idaho first and California last in terms of economic health. Benefiting from strong population growth and business investments, the Rocky Mountain region performed the best, with seven of the top 10 states hailing from that area. In sharp contrast, little growth registered in the Northeast.
New England states and the Mid-Atlantic states - two regions hit hardest by the recession - performed poorly, most of them falling in the bottom half of the survey.
An annual report started in 1990, the rankings allow readers to see a close-up of the country's economic health. The latest was available on newsstands Monday.
``We thought it was a good way to see what's really happening, using a breakdown by state,'' said U.S. News & World Report spokeswoman Celeste James.
Using computations of percentage change, U.S. News reporters reviewed six economic factors from the beginning of the recovery - early 1991 - to the present: employment, per capita income, new business incorporations, building permits, home prices and retail sales. ILLUSTRATION: Staff graphic
HOW THE STATES STACK UP
U.S. News & World Report ranked Virginia 30th economically among the
50 states.
Source: U.S. News & World Report
For copy of graphic, see microfilm
KEYWORDS: ECONOMY DEFENSE CUTS TOURISM
by CNB