Virginia economy well positioned to rebound, says expert
While it remains unclear how quickly the U.S. economy will recover, Virginia Tech finance expert Derek Klock says Virginia should bounce back from the economic storm.
April 8, 2020
While it remains unclear how quickly the U.S. economy will recover, Virginia Tech finance expert Derek Klock says Virginia should bounce back from the economic storm. Even as projections vary as to when the COVID-19 virus will peak in the commonwealth, Klock says time could be on the state’s side.
“Virginia is not only doing what it needs to in the near-term to weather the viral storm, but because of the demographics of its citizens and the structure of its economy Virginia should also be in a good position to weather the associated economic crisis.”
Klock calls Governor Northam’s decision to ‘lock-down’ the state when it had only 900 diagnosed cases, correct, if not popular.
“Most importantly it will allow the Virginia economy to self-isolate with mild symptoms rather than face a so-called economic-ER visit or worse. Longer isn’t always better, but less severe is always better. That is great news and reason number one of why Virginia should fare better than the average state.”
Klock, a professor of practice of finance in the Virginia Tech Pamplin College of Business, also points to the fact that Virginia is the 20th healthiest state in the country, receiving high marks for behaviors, community, and environment – all very important factors with the pandemic.
“It’s important to examine the demography of the Old Dominion. We are generally richer, healthier, and have better health insurance. Yes, there is a large difference in this statistic from the Urban Crescent to the southwest Virginia coal fields, but it still bodes well for the state.”
Virginia’s employment structure is also much less sensitive to the economic cycle, according to Klock, mostly because of the variety in composition of job sectors.
“While this message may offer little solace to the groups and individuals adversely affected by the virus itself or the loss of work, the case can still be made that Virginia is in a position many states would envy,” said Klock. “So whether by luck or design, Virginia’s economy--and thereby its citizens--looks good to weather the storm.”
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