Sunday, June 20, 2010
Report: Recession hit Roanoke area hard
In 2009, Roanoke suffered the second-largest job loss among Virginia's 11 metros.
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The numbers bob like tar balls and are about as welcome to those who worry that the Roanoke Valley already suffers from low self-esteem.
The latest issue of "Virginia Economic Trends," published quarterly by Richmond-based Chmura Economics & Analytics, suggests that the recession has slammed the Roanoke metropolitan statistical area a lot worse than many of the state's MSAs.
The paint-by-numbers portrait seems to counter conventional wisdom that the Roanoke metro's comparatively slow growth helps protect it from recessions' worst effects. No boom, no bust.
Yet according to the firm's report, Roanoke suffered in 2009 the second-largest job loss among Virginia's 11 metros, declining 4.5 percent on an annual average basis. The Winchester MSA had the highest decline at 5 percent. The Roanoke MSA includes the cities of Roanoke and Salem and the counties of Botetourt, Craig, Franklin and Roanoke.
Another finding: Many Roanoke Valley retailers, including restaurateurs and hoteliers, took a hit during the 12 months ending in March, a period when the Roanoke MSA, with a retail sales drop of 8 percent, "tied [with Blacksburg MSA] for the quickest pace of decline among the state metro areas."
In April, the Roanoke City Council raised the city's meals tax by 2 percentage points to help fund schools. Matt Bullington, president of the Texas Tavern, and many other restaurateurs opposed the increase.
He said the Chmura report's account of declining sales was no surprise.
The economy is still flat, Bullington said, and people "are still cutting back on discretionary spending, which of course food services tend to fall under."
Initially, Anne Piedmont, director of research for the Roanoke Regional Partnership, questioned the report's findings. She later determined her own analysis crunched the numbers differently. Others emphasized that the Chmura data reflect conditions only through March. Since then, they say, signs suggest Roanoke is bouncing back.
"The Roanoke region got into the recession later than some parts of the country and we're coming out of it later as a result," said Joyce Waugh, president of the Roanoke Regional Chamber of Commerce.
"This is the worst recession since the Great Depression," she added, "It's affected every country on the planet. That the impact is uneven is somewhat expected."
The Chmura report includes data available through March. It also examines economic indicators for the 12-month period ended in March and for calendar 2009.
A March report about the Roanoke MSA by Moody's Economy.com observed, "The recession has moderated substantially and is nearing an end in Roanoke."
And there are suggestions, Waugh said, that economic activity in the Roanoke metro area is up. "Businesses are hiring," she said.
Coy Renick is president and owner of The Renick Group, a Roanoke-based business specializing in professional recruitment and white-collar staffing.
"I'm seeing an uptick in demand for temporary workers," he said. "It's still slow for full-time employees with benefits. I think companies are hedging their bets on the recession [ending]."
The Moody's report described other evidence that the Roanoke MSA seems to be rebounding.
One example: "Both data and anecdotal reports confirm an improvement in housing fundamentals, with permits and [housing] starts trending slightly upward, though still at very low levels."
Homebuilder Brent Fortenberry of Bench Mark Builders has seen modest gains.
"Compared to a year ago, things, from my perspective, are definitely better," Fortenberry said. "I feel things are improving, although slowly."
As for commercial real estate, Stuart Meredith, executive vice president for Hall Associates, said there has been more of an increase in leasing than buying -- a trend he attributed to financing challenges and businesses worried about a prolonged recession-related hangover.
But, like the Chmura analysis, the Moody's profile described clouds both current and forecast. Its "relative vitality scale" evaluation of 384 metro areas ranked the Roanoke MSA toward the low end, at 332, with a score of 76 percent.
Moody's predicts the Roanoke metro "will capitalize on its growing role as a medical and retail hub for southern Virginia." During the year ended in March, the most job growth occurred in the health services and education sector.
In an e-mail, Chris Chmura, president and chief economist for Chmura Economics, said Carilion Clinic's growth "supported the gain but education and health employment grew in most MSAs and the country due to demographic trends and the fact that students often continue their education if they can't find a job when they graduate."
A low note concludes the Moody's narrative: "slow population growth will ultimately relegate Roanoke to a below-average performer at the far end of the forecast."
Yet during video segments broadcast June 8 during an "economic summit" in Roanoke, four local entrepreneurs extolled the region's virtues. They were Bonz Hart of Meridium; Linda Balentine of Crowning Touch Senior Moving Services; Leon Harris of Keltech; and, Tamea Woodward of EastWest DyeCom.
Meridium, an international software company, is headquartered in downtown Roanoke.
"Roanoke was a great place for us to recruit people into," said Hart during the video. "They are attracted to the great place to raise families, to the environment -- all the things they can do outside -- and just the ease of living here."
