
DATE: Thursday, November 13, 1997           TAG: 9711130458

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   68 lines

ODU WEIGHS AREA ECONOMY NEW MEASURE FOR HAMPTON ROADS' OUTPUT OF GOODS AND SERVICES FORECASTS 3.6 PERCENT GROWTH FOR '97

Hampton Roads' output of goods and services - ranging from trucks to hospital care - will grow a respectable 3.6 percent this year to $39 billion, according to a new forecasting tool devised by three Old Dominion University professors.

The trio devised a ``gross regional product'' for Hampton Roads partly to help business decision makers and others allocate their resources, said Gilbert R. Yochum, chairman of ODU's economics department.

``Whether they like it or not, many people have to use economic forecasts,'' said Yochum, one of the faculty members who designed the model.

The availability of a gross regional product for Hampton Roads also could serve as an economic development tool.

``We saw this as an opportunity to give people outside the region a measure of what's going on here,'' said Yochum, who specializes in economic analysis, fiscal affairs and labor economics.

In December, the university's College of Business and Public Administration will forecast the output of Hampton Roads' goods and services in 1998, he said.

Vinod B. Agarwal, an ODU economics professor, and Mohammad Najand, an associate professor in the accounting and finance department, also worked on the economic model.

Their system for measuring the annual output of goods and services in Hampton Roads relies on the same types of income data that the Commerce Department uses when it calculates the nation's gross domestic product.

The gross domestic product is closely monitored by the Federal Reserve and by private investors because it takes into account a spectrum of economic activity ranging from manufacturing to health care.

ODU's model draws on the Federal Reserve, Commerce Department, Virginia Employment Commission and other sources for its information.

While analyzing a quarter-century of data for Hampton Roads, the three professors concluded that the economic influence of the military and the federal government has been steadily declining in the region.

The role of federal and military activity accounted for 15 percent of Hampton Roads' goods and services in 1995, Yochum said. That was down from 29 percent in 1969.

Abundant military spending during the defense buildup of the early 1980s cushioned Hampton Roads from two back-to-back recessions elsewhere in the country. However, the pace of economic growth locally has mirrored the swings in the U.S. economy, especially in recent years, Yochum and his associates determined.

Yochum, Agarwal and Najand said it took six months to put their model together and then test it.

Similar models of gross regional product have been created for a handful of metropolitan areas elsewhere in the country, but this is the first measure of its type for Hampton Roads, the ODU professors said. ILLUSTRATION: [Color Photos]

D. KEVIN ELLIOTT

The Virginian-Pilot

Gilbert R. Yochum, Vinod B. Agarwal and Mohammad Najand...

GROSS REGIONAL PRODUCT vs. GROSS DOMESTIC PRODUCT

GRAPHIC

ROBERT D. VOROS

The Virginian-Pilot

SOURCE: Old Dominion University

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