Old Dominion University Economists Share Economic Prospects for 2026

Economic Overview - Virginia's economy is facing increasing headwinds, with growth in Hampton Roads projected to slow according to the 2026 Annual Economic Forecast [1] - The event was attended by over 350 business and community leaders to discuss economic prospects for the coming year [2] Key Economic Challenges - Rising inflation, consumer pessimism, slowed job growth, lack of housing inventory, and negative impacts of tariffs were highlighted as primary challenges [3] - Virginia's economic growth was lower in 2025 due to reductions in federal civilian employment, higher tariffs, and policy uncertainty [3][5] Wealth Distribution - While some economic figures indicate growth in the U.S., the wealth distribution shows that households in the top 30% are faring better than the remaining 70%, who are either spending more than they earn or just breaking even [4] Recession Indicators - Moody's indicates that Virginia is already in a recession, with slow growth expected to continue into 2026 [5] - Rising prices of essential items, such as a 20% increase in coffee prices in 2025, are contributing to low consumer sentiment [6] Employment Trends - Employment growth is slowing, with over 6,000 federal civilian jobs lost in Hampton Roads and more than 23,000 across Virginia in 2025 [7] - The federal civilian workforce lost 179,000 workers nationally in October 2025, indicating a significant downturn [7] Labor Market Conditions - Virginia began shedding labor force participants in February 2025, continuing through the year, resembling recessionary conditions in the labor market [8] - 2025 experienced the weakest job growth since the pandemic, with employers becoming hesitant to hire [8] Housing Market Insights - The housing market in Hampton Roads faces a supply problem, with inventories significantly below normal averages [9] - A call for a basic housing strategy and reforming zoning regulations was made to promote high-density, mixed developments and reduce living costs [9] Economic Growth Strategies - To stimulate economic growth, the private sector needs to diversify and explore areas with competitive advantages [10] - Increased defense spending is expected to benefit the Hampton Roads economy, although it presents certain downsides [9]