DATE: Friday, October 10, 1997              TAG: 9710100852

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: STAFF REPORT 

                                            LENGTH:   35 lines

ECONOMIC ACTIVITY IN HAMPTON ROADS WEAKENED

Economic activity in Hampton Roads weakened in August, the fifth straight month of decline, according to an index released Thursday.

The Hampton Roads Economic Performance Index had a reading of 108.4 for August, said David G. Garraty, author of the index and professor of economics at Virginia Wesleyan College.

The August figure represents an annualized 3.8 percent rate of decline from July's reading of 108.8.

Using seasonally adjusted employment data weighted to reflect earnings differentials across industries, the index measures the Hampton Roads economy against a base established from 1991 to 1993.

The trend of five consecutive months of decline signals a slowing of the regional economy, Garraty said.

``The last few months have not been generating much cause for optimism,'' he said.

The sluggish performance of the index reflects weak employment trends in the region.

Compared to a year earlier, total employment was up 0.6 percent last August. The areas within Hampton Roads that do show employment strength over the past year tend to be a relatively small component of the overall economy's mix of industries, Garraty said.

Over the past year, finance, insurance and real estate (4.9 percent), construction and mining (3.1 percent) and transportation, utilities and commissions (2.5 percent) have shown the region's strongest employment growth, Garraty said. Those three industries combine to represent 16.3 percent of the region's total growth. KEYWORDS: HAMPTON ROADS ECONOMY

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