Posted in 2015|West Virginia’s Future
With 2014 dead and gone, 2015 promises hope for an economic revival across West Virginia.
Business, industry and financial professionals predict growth in the Mountain State’s housing market, employment rate, median income, population, minimum wage and consumer optimism.
A slew of aspects inspire a boost toward local economy. Below, we will analyze some of the biggies.
Housing Market:
Single Family Homes: More than 2,200 single-family homes were started during 2013, a 23 percent increase over 2012. The cumulative number of homes started during the first half of 2014 declined nearly 14 percent, compared to the same period a year ago, The annual pace of single-family housing starts have increased 35 percent over the low point in 2011.
Multi-Family Units: Multi-family housing starts returned to their pre-recession level in early 2013, and are expected to continue to grow even more during 2015, further contributing to the economic recovery.
Home Improvements: According to the Huntington Bank 3rd Annual Midwest Economic Index Survey, 60 percent of West Virginians said they plan to make home improvements in 2015. That’s a jump of 38 percent, who planned improvements in 2014. This number points to an increased confidence in the local housing market and pride in homeownership.
“The consumer sentiment on the real estate market is in contrast to our analysis which indicates that housing prices in the states where surveyed consumers live are generally climbing and relatively stable,” said George Mokrzan, director of economics at Huntington Bank. “The survey confirms the recovery we are seeing in our local markets as unemployment rates and, more recently, gas prices decrease.”
Home Prices: The decline in West Virginia home prices in 2014 was 6.8 percent, compared to 18 percent for the nation. Since bottoming out in the second quarter of 2011, prices for single-family homes in West Virginia have rebounded 5.4 percent. Not surprisingly, the strongest growth in house prices since mid-2012 has taken place in those parts of the state experiencing the healthiest gains in employment and population.
Employment:
West Virginia’s employment rate is expected to grow through 2015, leading to even more consumer confidence.
“Overall, we expect employment growth, income growth, and the unemployment rate to be stronger in the coming five years, compared to what we have observed over the past decade,” stated the Economic Outlook 2015, published by The Bureau of Business & Economic Research West Virginia. “Employment in West Virginia is estimated to increase 0.9 percent per year through 2019.”
The Construction Sector is expected to add jobs at the fastest through 2015.
Minimum Wage:
In 2015, West Virginia will see minimum wages above the federal level, which has been unchanged for more than five years. Gov. Earl Ray Tomblin signed the law raising the Mountain State’s minimum wage from $7.25 to $8.00 an hour and then bumping it to $8.75 in 2016.
Median Income:
Per capita personal income is expected to grow in 2015. The Bureau of Business & Economic Research West Virginia predicts an average rate of growth to hover at 2.3 percent during the next five years. This is up by nearly 1 percent from 2003 to 2013. The Mountain State has witnessed a stronger growth over the past five years, compared to the rest of the nation.
Population:
West Virginia is expected to see a rise in the senior citizen population during the next five years. The state’s under-65 age groups are predicted to shrink and the 65-and-over group is predicted to grow. Over the long term, this will eventually lead to nearly one in four West Virginia residents to be at least 65 years of age.
While the state overall is expected to lose population in coming years, 16 counties are expected to add residents. Population gains will be most heavily concentrated in North Central West Virginia and the
Eastern Panhandle, according to The Bureau of Business & Economic Research West Virginia predictions.
Consumer Optimism:
As gas prices decrease and minimum wage increases, West Virginians gain confidence in the local economy. More area residents plan to make significant purchases in 2015, according to Huntington Bank’s 3rd Annual Midwest Economic Index Survey. Some of these future purchases include new vehicles and major home improvements.
That’s good news for West Virginia car dealers. About 16 percent of local residents say they will “definitely” purchase a new car in the coming year. That’s up from just 3 percent, who said they would last year.
Home improvement stores and construction businesses have good news too. About 60 percent of West Virginians say they plan to make home improvements in 2015. That’s up from 38 percent, who planned improvements last year.
Just six percent of those surveyed in West Virginia and said they planned to sell their home in the coming year. This points to an increased pride in homeownership throughout the Mountain State and a trust in the stability of the local housing market.
Consumer confidence is vital to inspire economic growth. This confidence is evident throughout the survey.
“Fifty-six percent of West Virginians say they are better off financially now than they were five years ago, during the height of the recession,” the survey stated. “As a result, more consumers say they are willing to make big-ticket purchases in the coming year.”
Conclusion:
Into the new year, we’re already seeing lower gases prices and an increase in minimum wages: early signs of an economic revival. No one know what the future holds for West Virginia’s economy. However, we can only hope that this early momentum leads to new jobs, lower unemployment rates, a jump in the housing market, new businesses eyeing the state, population growths and income boosts. If consumer confidence is the key to unlocking this door, than West Virginia may just be crossing the threshold of an economic recovery.
Sources:
Huntington Bank 3rd Annual Midwest Economic Index Survey
The Bureau of Business & Economic Research West Virginia
