April 11, 2017
SFDC, MVLCC Economic Outlook Summit Draws a Crowd
By Edythe Kelleher, Executive Director, SFDC
The 2017 Economic Outlook Summit filled the Belle Haven Country Club ballroom with 200 attendees on the morning of Thursday, April 6. The Summit, a joint annual event hosted by Southeast Fairfax Development Corporation and the Mount Vernon – Lee Chamber of Commerce, featured six prominent speakers: Dr. Ann Battle Macheras, VP of Research at the Federal Reserve Bank of Richmond, Dr. Terry Clower, Deputy Director of George Mason University’s Center for Regional Analysis, Deputy Fairfax County Executive Rob Stalzer, Dr. Frank Nothaft, Chief Economist at CoreLogic and former Chief Economist at Freddie Mac, Dr. Gerald Gordon, CEO of the Fairfax County Economic Development Authority, and moderator Rebecca Cooper of the Washington Business Journal.
Although job growth has been strong in Virginia and the DC region recently, the theme of the presentations was uncertainty. Will the Trump Administration be successful in cutting thousands of Federal jobs in our region, resulting in the spin-off loss of tens of thousands of jobs? How might proposed increased defense spending result in more jobs, since Northern Virginia receives a large proportion of Federal spending on contractors? Is another round of sequestration in the offing?
Dr. Macheras set the stage for later speakers, pointing out that, while unemployment is dropping, labor market participation rates have been falling for years before leveling off and showing slight growth recently. The retiring Baby Boom generation means that the overall labor market growth is slow. Productivity gains have also been low since a peak in 2010.
It takes about five tourism or home healthcare jobs to economically replace one in business and professional services, and availability of a well-educated workforce is key to attracting those jobs. However, for the last few years our region has experienced a net outflow of the native population. People are no longer moving here from other parts of the country, meaning we are reliant on international immigration to meet our workforce demands, according to Dr. Clower.
Speakers agreed that rising interest rates will result in lower housing inventory and higher prices, as homeowners choose to stay in their current home. Dr. Clower said, “Homeowners may love their current low mortgage rates more than they love their houses.” Refinancing will make up a smaller portion of the mortgage market as homeowners, wanting to keep their low rate mortgage in place, turn instead to home equity lines of credit (HELOCs).
Dr. Nothaft noted the lower percentage of nationwide homeownership resulting from the recession and foreclosure crisis. He stated, “The supply of single-family rental houses is now 50% great than it was prior to the recession.”
Although Fairfax County has a large amount of occupied office space, approximately 20 million square feet, or 17% of the total, is vacant. Much of the vacancy is in older buildings, and both Dr. Gordon and Mr. Stalzer addressed the county’s efforts at repurposing office buildings for other uses. Rebecca Cooper commented on the closing of retail stores and how that is percolating through our local economy.
SFDC hopes to upload video from the Summit to our YouTube channel soon. Meanwhile, the presentation slides are on the SFDC website at: http://www.sfdc.org/whats-happening/events-2/economic-outlook-summit-2017/