West Virginia’s economy, like the economies of most states and the entire country, has taken a body blow during the pandemic. Recently released figures from WVU’s Bureau of Business and Economic Research show just how hard the virus and the economic shutdown impacted the state.
—The state lost 94,000 jobs from February through mid-April.
—The state’s jobless rate shot up from around five percent to over sixteen percent in April.
—The hardest hit sectors were retail, leisure and hospitality. Health care was also impacted as hospitals stopped elective procedures.
—Dr. John Deskins, director of the Bureau, said leisure and hospitality lost more than 50 percent of its jobs. “It’s been so hard hit that it may be the one sector where lasting damage has been exerted on the economy.”
However, the Bureau’s report also shows that the economy has been coming back.
—Between April and August, the state gained back 57,000 of the 94,000 lost jobs.
—The state’s jobless rate was back down to below nine percent in August.
Deskins believes West Virginia will have a “v” shaped recovery because the downturn was not because of any underlying fundamentals of the economy.
“It was a shutdown because of a public health crisis, and we keep looking for signs of underlying permanent lasting economic damage and quite frankly we don’t see a whole lot of that quite yet,” he said on Talkline.
So, what does the future hold?
—The Bureau predicts that even with a “v” shaped recovery, it will still take until 2022 for reemployment to reach pre-pandemic levels. “Job growth is forecast to increase nearly one percent per year on average through 2025,” according to the report.
—Energy sectors will drive most of the growth, mostly in natural gas production.
—The construction sector will continue its volatility, mostly because its growth “will be tied to public spending on big infrastructure projects.”
The growth that occurs in the state’s economy will not be evenly distributed. The Bureau’s research predicts the highest rates of job growth will be in the northern half of the state.
Additionally, most counties will continue to lose population—West Virginia has lost 65,000 residents since 2012. Only about a dozen of the state’s 55 counties will see increases in their population.
The ongoing drug crisis, other health issues, an older population and lower-than-average education attainment mean the state will continue to have problems training and retaining a qualified workforce.
The annual economic forecast has an all-too familiar ring. Even after recovery from the pandemic, we will face some of the same headwinds that have kept the state’s economy on a slow growth pathway.