DATE: Wednesday, October 22, 1997           TAG: 9710220541

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MICHAEL CLARK, STAFF WRITER 

                                            LENGTH:   56 lines

SUSTAINED GROWTH SEEN FOR REGION'S ECONOMY ODU RELEASES FORECAST FOR THE REMAINDER OF '97.

The economic engine that propelled Hampton Roads at fairly high speeds through the first three quarters of 1997 is still moving forward, just not as swiftly.

In its fourth-quarter economic forecast, released Tuesday, Old Dominion University draws from five economic measures to explain how the regional economy is doing relative to last year and to the first three quarters of this year.

Each measure can be seen as a cylinder in the regional economic engine.

Helping ignite the growth trend, tourist spending will be up 8.7 percent from the fourth quarter of 1996, said ODU economics professor Gilbert Yochum.

``Hotel room revenues are up because of the fixed number of rooms and because of rising incomes,'' he said.

The rising incomes are also seen in retail sales, which rose by about 4 percent for the first half of the year and then by 5 percent in the third quarter, despite a slight decline in employment growth for the quarter, Yochum said.

``This indicates that regional incomes are rising rapidly,'' he said.

As employment and income continue to rise, and interest rates remain relatively low, growth should reach 2.9 percent in fourth quarter retail sales from a year ago.

As local employment through August rose by about 3 percent from 1996, it outpaced the national growth rate of 2.4 percent over the same period, according to the report. Hampton Roads employment began to slow in August, but high regional retail spending, tourism and port activity along with low interest rates should ensure fourth quarter growth of about 0.7 percent over the same period in 1996..

The port saw double-digit increases in growth of general cargo tonnage through the third quarter. While the growth will continue this quarter, it will be at a lower rate. Yochum said the port should see cargo traffic rise 4.3 percent.

Unlike the other cylinders in the Hampton Roads economic engine, the value of single-family housing permits did not enter the fourth quarter off a big third-quarter increase.

``The second and third quarters of this year saw a 15 percent decline from the previous year,'' Yochum said. ``But last year was a very good year in home construction in this area.''

Riding rising incomes and low mortgage rates, the forecast shows that new housing construction will increase by about 7 percent over the fourth quarter last year. ILLUSTRATION: GRAPHIC

HAMPTON ROADS FORECAST

SOURCE: OLD DOMINION UNIVERSITY ECONOMIC FORECASTING PROJECT

The Virginian-Pilot

[For a copy of the graphic, see microfilm for this date.] KEYWORDS: ECONOMY

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