THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, December 14, 1995 TAG: 9512140401
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 62 lines
With base closings and the recession behind it, Hampton Roads could enjoy its best year of the decade, an economist predicted Wednesday.
Russel Deemer, an economist at Crestar Bank in Richmond, presented an optimistic forecast for the Hampton Roads economy that highlighted slow but steady growth in 1996.
``I'm rather bullish on Hampton Roads,'' Deemer said. ``Next year's going to be the best year in Hampton Roads of the 1990s.''
Deemer's comments about the region came during the Economic Outlook presentation of the Economics Club of Hampton Roads, sponsored by the club, Crestar Bank and Old Dominion University.
Defense cuts and slow recovery from the 1990-91 recession stifled growth in Hampton Roads during the early part of the decade. The region trailed the nation and other parts of the state in economic growth.
Now Hampton Roads is poised to outpace - or at least keep up with - other areas, economists say.
Automobile registrations, for instance, are climbing, which could mean consumer confidence is picking up. Consumers buy cars when they feel secure about their jobs and confident about their ability to make payments.
Regional employment, for example, should grow faster than the state in 1996, Deemer predicted. Economic development announcements this year, such as a TWA reservations center in Norfolk, the Lillian Vernon expansion and businesses opening or expanding operations here, will translate into new jobs next year.
Military downsizing decisions by the Defense Base Closure and Realignment Commission will boost the region in the next two years. Hampton Roads escaped the closure of its largest military installations. Plus, the consolidation of the military in Hampton Roads will add 3,600 jobs in 1996.
``The military has considered Hampton Roads to be a good place to do business,'' Deemer said. ``It's consolidated its operation here.''
That was punctuated last week when the U.S. Coast Guard announced plans to move nearly 500 jobs to downtown Norfolk.
In addition, private sector defense-related layoffs locally, namely job losses through attrition at Newport News Shipyard, are expected to taper off. Elsewhere in the country, the pace of defense layoffs in the United States is expected to accelerate in 1996.
The country is not creating jobs at the same rate as 1994, said Christine Chmura , chief economist for Crestar Bank, who gave a national economic forecast at Wednesday's gathering. Last year, the United States added 300,000 jobs per month, double the 150,000 jobs per month that it created in 1995, she said.
Housing activity is dropping off and consumer confidence is not as high as before.
Chmura predicted that the national economy would remain on a ``soft landing'' track with the Federal Reserve likely to ease interest rates and modest employment growth showing up.
``The momentum is not as great as last year,'' Chmura said.
KEYWORDS: ECONOMY by CNB