South Tidewater News

ODU Economic Forecast Predicts Challenging 2023 Because of Inflation, Labor Force Challenges

For 28 years, Old Dominion University economists have delivered an annual Economic Forecast to an audience of community leaders early in the new year. In just about every one of those years, the report has urged diversification in the Hampton Roads economy to decrease its reliance on federal defense spending.

However, in the 2023 report, delivered Jan. 25 to a sold-out audience in the Big Blue Room of the Ted Constant Convocation Center, Economic Forecasting Project Director Vinod Agarwal suggested the disproportionate share of Department of Defense spending in our local economy could spare Hampton Roads from a recession in 2023.

“Unless there are serious political issues in the U.S. Congress, I do not see a recession in Hampton Roads, largely because of the increase in defense spending,” said Agarwal, professor of economics in the Strome College of Business. The Hampton Roads economy is predicted to grow by 1.7% this year, according to ODU researchers.

The annual forecast, delivered by Agarwal and Robert M. McNab, professor and director of the Dragas Center for Economic Analysis and Policy, was not chock-full of good economic news, however. Inflationary pressures, political uncertainty and ongoing challenges encouraging workers to re-enter the labor force combined to see the federal economy shrink in the middle two quarters of 2022, before rebounding in the fourth quarter.

Original source can be found here