DATE: Thursday, October 16, 1997            TAG: 9710160560

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MICHAEL CLARK, STAFF WRITER 

DATELINE: NEWPORT NEWS                      LENGTH:   89 lines

AREA INCOME CONTINUES TO LAGBUT THE OUTLOOK IS IMPROVING AS HIGH-TECH JOBS TAKE UP SOME SLACK REGIONALLY.

Employment and income data from 1994-95 - the latest available - still shows Hampton Roads lagging other metropolitan areas, according to an economic report released Wednesday. But the worst may be over.

``We've been in a troughing mode for some time and our economy has now begun to strengthen,'' said John W. Whaley, economic director of the Hampton Roads Planning District Commission, at the commission's annual meeting at the Mariners' Museum. ``Through '96 and '97, the trend is much better.''

Beside employment and income, Whaley's quarterly economic report looked at tourism, high-tech jobs and taxes in Hampton Roads. Among his findings:

Hampton Roads earnings per worker remained at about 88 cents for every dollar earned nationwide.

Tourism declined somewhat.

High-tech jobs will provide employment growth.

Virginia has a lower than average tax burden.

But the combination of factors in all areas led Whaley to conclude that the long-term economic outlook for Hampton Roads is improving, he said.

Figures comparing Hampton Roads incomes to the nation haven't changed significantly for a number of years, Whaley said. The 1994 estimate that Hampton Roads workers earned 87 cents for every dollar nationally was revised slightly upward by the Bureau of Economic Analysis, an arm of the U.S. Commerce Department, he said.

``They did adjustments, not just for 1994 and 1993, but all the way back to 1969,'' he said. The numbers, he explained ``are going to be revised next year and the year after that.''

He expects the income figure to improve. ``The good news is that we've stabilized when compared to the U.S.,'' he said. ``There is some reason to expect that in 1996 and 1997 and 1998, as new data comes in, that for a variety of reasons, the numbers may begin to rise.''

With less than 1 percent employment growth between 1994 and 1995, Hampton Roads ranked next to last among 16 metropolitan statistical areas in the Southeast, Whaley said. ``But even 1 percent is significant for us,'' he said.

Among 315 U.S. metropolitan areas, Hampton Roads was 285th in employment growth in 1969-1970. In 1994-95, the area reclaimed the same spot - after climbing as high as 53rd in 1984-85.

Still, Hampton Roads has done a good job creating private sector employment while simultaneously losing high-paying federal and civilian defense industry jobs, he said. Most of the new jobs have been in low-paying retail and service sectors.

Whaley said he expects greater employment growth as the defense job force stabilizes. ``The bloodletting is not over. We will continue to lose jobs, but the pace should be substantially slower,'' he said.

Many of the job gains will be found in high-tech industries, an area where Hampton Roads has succeeded, Whaley said. The region, although a distant second, is behind only Northern Virginia in high-tech wages and salaries.

That trend should continue. The WEFA Group of Philadelphia, a consulting firm, ranks Hampton Roads 15th among its ``High Tech Gazelles,'' major markets where high-tech growth is greatest on a percentage basis. That ranking puts the region ahead of such markets as Seattle and Washington, D.C.

Tourism, too, saw declines in constant dollar expenditures in Hampton Roads through 1995.

``We lost 5,000 jobs in the industry,'' Whaley said. Tourism ``helped the region maintain its size; it did not grow the region,'' he said.

From a high point of nearly $2 billion in constant dollar expenditures in 1988, tourists spent under $1.75 billion in 1995.

The good news on the tax front is that, compared to North and South Carolina, Georgia and Florida, Virginia has low combined state and local taxes, Whaley said. ``Virginia is in the lower half of the U.S. in terms of the state's tax burden,'' he said.

This report marks the first time the commission has looked at the tax situation in its quarterly economic reports, Whaley said.

``We have been getting questions along that line for a number of years,'' he said.

Concern about the region's competitive position and tax structure as it relates to other communities and other states prompted the tax report.

Whaley noted the relation is unclear between taxes and regional growth. Cutting taxes promotes growth, he said, while cutting expenditures tends to retard growth.

The economic report drew employment information from the U.S. Bureau of Economic Analysis and income and tax statistics from the U.S. Census Bureau, Whaley said. Tourism information came from the Virginia Tourism Corp., Richmond. ILLUSTRATION: Graphic

The Virginian-Pilot

HAMPTON ROADS LOW IN TAXES AND EARNINGS

SOURCE: The Hampton Roads Planning District Commission

[For complete graphic, please see microfilm] KEYWORDS: SALARIES INCOME HAMPTON ROADS

STATISTICS

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