The Virginian-Pilot 
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Tuesday, December 12, 1995             TAG: 9512120376
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER 
                                             LENGTH: Short :   46 lines

AIDED BY CONSTRUCTION GROWTH, LOCAL ECONOMIC INDEX RISES 0.6 IT'S THE STRONGEST RISE SINCE OCTOBER 1994'S 0.8 INCREASE.

Hampton Roads' economy strengthened in October, buoyed mostly by growth in the construction industry, according to a economic index released Monday.

The Hampton Roads Economic Performance Index rose to 105.7 in October, up from 105.1 during September.

``With the exception of January and October, the region has shown little strengthening in economic activity throughout 1995,'' said David Garraty, an economist and business professor at Virginia Wesleyan College, which administers the index.

The index is constructed from seasonally adjusted job data weighted by average industry wages and compared with a 1991-93 base period.

October's gain was the strongest increase in the index, by six-tenths of a point, since October 1994, when the index shot up by eight-tenths of a point.

Garraty suggested that Hampton Roads might be poised for stronger growth next year based on the index's better showing but did not want to read too much into its performance.

Construction employment, which led the index, increased at a 31.2 percent annual rate over September.

Services, up 15 percent, also contributed to the index's October climb, followed by transportation, utilities and real estate, up 8 percent, and government.

Manufacturing continued to skid, down by 5.3 percent. There were also losses recorded in finance, insurance and real estate, which fell 3.8 percent.

The Virginia economy grew at a 4.2 percent annual rate in October as the Virginia Economic Performance Index rose to 107.8 from 107.4.

Transportation, utilities and communications led the statewide index with a 14.6 percent increase over September.

Jobs in manufacturing and government remained the weakest sector in Virginia. Statewide government employment is down 1.6 percent over the past year with a net loss of 10,000 jobs.

KEYWORDS: ECONOMIC INDEX ECONOMY by CNB