Old Dominion University released its annual State of the Commonwealth Report on December 18, 2023. While the authors found Virginia’s economy improved in 2023, they also found that people continued to leave the commonwealth, the economy grew slower than in neighboring states, and the economic activity was not evenly dispersed.
Economic “good news” offered by the report includes a “record number of Virginians” who were “at work or looking for work,” with workforce “participation increased above pre-pandemic levels.” Virginia’s hotel industry also saw growth, with revenues surpassing those of 2019.
Among bad news, the authors noted that while the economy grew, it failed to outpace the national average, as well as its neighbors. The report also found that “[t]he recovery from the shock of 2020 was not evenly distributed across Virginia.”
For example, hotels located outside of major cities had mostly recovered from pandemic-era economic downturns by the end of 2021, but those operating in major metropolitan areas needed until 2022 to match 2019 revenues. Only those operating in Northern Virginia continued to struggle into 2023. Though hotels have rebounded in Virginia, and the report notes investors “are optimistic” about the industry’s future, increased costs of renting hotels, combined with increased competition from short-term rentals, like Airbnb, and a decline in demand for hotel rooms could pose risks.
The authors also note that more people left Virginia for other states in 2023 than moved to the state from within the country, continuing a pattern that began in 2013. Between 2020 and 2022, Virginia lost 29,755 residents to other states. Over the same time period, though, Virginia received 52,762 new residents who migrated from outside the United States.
Virginia is also growing more slowly than its neighbors as of 2022, with a population growth rate four times lower than that of North Carolina, which has outpaced Virginia for the past four decades. Still, Virginia’s growth outpaced that of Maryland and West Virginia, and came close to the national average.
Dragas Center director Robert McNab, who is the lead author of the report, stated that he expects Virginia’s economy to “grow in 2024,” but that “work remains to be done to match the economic performance of our peers.”
The authors note, “Slowing population growth (or an outright decline in the resident population) may be a warning sign about a state’s future economic prospects as residents may be ‘voting with their feet’ and seeking improved economic opportunities elsewhere in the country.”
Governor Glenn Youngkin (R) similarly raised his concern about the number of people leaving Virginia in his speech before the Virginia House of Delegates on December 21, 2023, when he delivered his budget proposal ahead of the upcoming legislative session, noting “Americans and Virginians [were] choosing to go” to states with “lower taxes or [which] had started their journey to lower taxes.”
The governor declared that “Virginia must compete even harder” to remain competitive.
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Tom Pappert is the lead reporter for The Tennessee Star, and also reports for The Georgia Star News, The Virginia Star, and The Arizona Sun Times. Follow Tom on X/Twitter. Email tips to [email protected].
