America's economy is slated to bounce back some in the coming fiscal year, William and Mary Chancellor Professor of Business Emeritus Roy Pearson told a room of local business owners and residents Tuesday, but Virginia may not be as prosperous.
There are some factors keeping the state from advancing at the pace of other parts of the country, Pearson said during an Economic Development Authority luncheon Tuesday.
"We're looking at a modest acceleration leading into a better year in (fiscal year) '18," Pearson said. The American economy struggled to expand in recent years because of two main reasons.
"Businesses sold out of inventory; they did not produce enough to meet demand," he said. "We also did not have enough energy investment."
The same factors that once hampered the economy are now driving it on a national level. Pearson said people won't see much in the way of results until the end of the year, but consumer spending could be a harbinger, of sorts.
"Consumer confidence is running the highest since 2007, which was before the recession," Pearson said.
"It's good to see Roy so optimistic," said Rick Overy, the vice chair of the Williamsburg Economic Development Authority. "There have been other times where he hasn't been."
Overy also has a direct stake in the local economy: he's a partner at Compass Wealth Strategies, a local wealth management firm.
On a state level, Virginia may not perform as robustly as the rest of the country.
"The increase of energy investment and in business, those are mostly in other places," Pearson said. "Virginia is probably going to be a little softer this year than other states."
Looking past the next fiscal year, the disagreements between lawmakers in both major parties mean it's too hard to predict how the changes they make could affect the national economy, according to Pearson.
"It all depends on what policies are changed, and how soon that they do that," he said.
To stabilize its economy long term, Pearson acknowledged that Virginia has structural issues it has to address.
"We need more investment, and we aren't getting enough labor productivity," he said. "Those really are the big issues."
As the nation grows, businesses that want high-skilled workers can see that Virginia is not producing enough of them to meet demand.
"The skills of the labor force are what really need to be addressed," he said. "If there are jobs that want those workers, it's really not Virginians who are going to get those jobs."
In an October meeting at William and Mary's Mason School of Business, Gov. Terry McAuliffe echoed the same point about preparing children in Virginia for a rapidly changing workforce.
"Either we fill those jobs, folks, or those jobs go to other states," McAuliffe said. "That's how serious this is, and that's why all of this big data and analytics is really so important. We've got to be making sure we're filling these high-tech jobs for the Commonwealth of Virginia. It is absolutely critical to our success, and it comes down to our education system."
Wright can be reached by phone at 757-345-2343.