Lynchburg economic conference shows area has strong points

Amid the ongoing global financial turmoil, about 100 Lynchburg-area business and government leaders gathered Tuesday to hear experts’ opinions on the local economy.

The outlook?

If the nation enters a recession, it will follow here.

Participants at Lynchburg College’s 18th annual Economic Outlook Conference spent a couple of hours Tuesday morning hearing how the region would fare in the face of a troubled national economy.

Joseph Turek, dean of LC’s school of business and economics, said the local economy has its strong points. The area’s home foreclosure rate is minuscule compared to other areas, and home sales continued to fetch increased prices this year.

Also, much of the region’s economic growth comes from health care and education, two industries that tend to be recession-proof, Turek said.

“If there is an economic slowdown, it probably hasn’t hit Lynchburg,” he said, but could be on its way.

Turek also told listeners that several factors of the local economy trouble him:

- Spending is slowing. Taxable sales in the region grew 0.4 percent from the first quarter of 2008 to the second quarter. “That does not bode well for the coming holiday season,” he said.

Over the same time period, taxable sales grew by more than one percent in Roanoke, Danville and Blacksburg.

- From 2001 to 2006, the region’s median household income grew much more slowly than the nation’s.

- The region’s poverty rate, especially among children, is higher than the national and state poverty rates and increasing at a faster pace.

“We appear to have a growing poverty problem.”

- From 2001 to 2006, the region’s piece of the country’s economic pie shrank. That was fueled somewhat by a loss of manufacturing jobs, which left the region with a lower percentage of the nation’s manufacturing jobs than it had before.

“Something is going on that is making the region a relatively unattractive place for businesses to locate,” Turek said. “We actually need to go out and talk to businesses in the community and find out what’s constraining growth.”

He said that 2006 is the latest year for which all the data for that analysis is available.

Considering several business expansions announced this year, Turek said it’s possible the region made up for that loss after 2006, but he said more data would be needed for a conclusive analysis.

The conference’s keynote speaker, Steven Peterson, director of research for the Virginia Retirement System, said that low inventories and durable good sales indicate the nation is already in recession.

He predicted that the economy would begin recovery next summer.

Some listeners at the conference had questions about this year’s presidential election and how it could affect the economy.

Both Turek and Peterson shied away from listeners’ requests to say which presidential candidate has the best health care or economic recovery plan.

Rex Hammond, president of the Lynchburg Regional Chamber of Commerce, which co-sponsored the conference, said he had expected intense interest in the economic forecast considering recent events.

He said attendance was on par with previous years. The event draws “a niche crowd, because we have niche information.”