What Will The Next Year Look Like For W.Va.’s Economy?
The COVID-19 pandemic devastated the economy across much of the world and the country, including West Virginia. But, economists are hopeful for recovery with the rollout of the vaccine, pointing to early signs of a rebound across several sectors and a prediction for full recovery to pre-pandemic levels next year.
This hopeful forecast is in contrast to the grim early days when within the first month of the Mountain State shutting down due to the pandemic, unemployment rates soared. West Virginia lost 92,000 jobs in April alone.
“This was what we lost, you know, during the entire Great Recession, but, having that happen in one month,” said Sean O’Leary, a senior policy analyst for the West Virginia Center on Budget and Policy.
But by August, the state gained back more than half of those lost jobs, O’Leary said, adding that the economy initially recovered quickly as businesses re-opened in the summer. Since then, the recovery has not been as swift.
“As the pandemic has dragged on, as cases, you know, continue to rise, it never really got under control,” he said. “Things started to slow down, and we stopped adding thousands of jobs each month.”
Although growth has been ebbing and flowing this past year, the good news is West Virginia’s unemployment rate was 6.2 percent in November. This is down from April, when it was as high as 15.9 percent.
However, “economic recovery” for West Virginia doesn’t mean getting back to “the before times” or pre-COVID, O’Leary said, as the state’s economy was already in a slump when the pandemic hit.
“West Virginia in 2019 -- we were steadily losing jobs, our economy was slowing down. We were headed in a negative direction, before” COVID-19 swept the nation, he said.
On average West Virginia lost about 1,000 jobs a month in 2019, according to the U.S. Bureau of Labor Statistics.
But it is not all doom and gloom -- the state is on track to be back to a pre-pandemic economy by the end of 2022, said John Deskins, chief economist for West Virginia University. He said that even if those economic numbers are not the best, it’s a positive step for the future.
“We have to get back to where we were at the beginning of 2020 before we can get beyond that point. So we're just taking one step at a time,” Deskins said.
Every industry is expected to recover and even see some growth, except for leisure, hospitality and retail, according to the West Virginia Economic Outlook Report for 2021-2025, of which Deskins is a co-author.
“That's the sector where we have things like restaurants and bars,” Deskins said. “At one point, over half the jobs in that sector were gone back in the spring, when the lock downs were in full force.”
Those sectors can recover, Deskins said, but their resurgence is likely to come after 2022.
Predicting a full economic forecast is tricky, he added, as this recession is not based on an economic problem -- like the country’s GDP, tariffs, stock market crashes or the housing bubble.
“In this case, the recession was driven by a public health problem that came, you know, completely out of left field,” Deskins said. “So the cause of this recession is completely outside of my wheelhouse.”
West Virginia’s economic trajectory could depend a lot on the roll-out of the vaccine, Deskins said. If people are vaccinated, they are more likely to go out shopping, go to work, eat out at restaurants or take trips -- all things that stimulate the economy.
President Joe Biden’s goal is to have 100 million Americans immunized within his first 100 days in office. That is almost a third of the nation’s population getting the vaccine in less than four months.
Thus far, West Virginia has administered more than 130,000 vaccinations, with more than 26,000 people fully vaccinated (receiving both doses). Along with four other states, West Virginia is leading the nation in getting shots into people’s arms. Governor Jim Justice recently announced that 10,000 vaccines will be administered daily going forward.