Va. economic outlook is positive, says Weldon Cooper Center forecast

Virginia’s long-term economic outlook is positive, according to the University of Virginia’s Weldon Cooper Center for Public Service’s inaugural economic forecast released Monday.

Weldon Cooper economists predict Virginia’s gross domestic product in 2025 will increase 2.4%, outpacing national GDP growth. The U.S. GDP’s growth is expected to be 1.9% this year, slower than the 2.5% growth seen in 2024, according to a December 2024 Moody’s Analytics Forecast.

Statewide inflation will moderate, according to the Weldon Cooper forecast, and the consumer price index will rise 2.6%, a 0.1 percentage point decrease from the CPI growth measured in 2023 and 2024. The national CPI rise is also expected to be 2.6%, according to Moody’s forecast.

Virginia’s employment growth will slow, dipping below the national average, but the state’s unemployment rate will stay below the national average, according to the forecast. Weldon Cooper economists expect the state’s employment growth to be 0.71% in 2025, down from the 1.7% growth seen in 2024.

The predicted employment growth represents a net gain of more than 30,000 jobs. The forecast predicts the average Virginia unemployment rate will be 3.4% this year.

The U.S. nonfarm employment rate is expected to increase 0.73% in 2025, and the average unemployment rate is projected to be 4.1% in 2025, according to Moody’s forecast.

The sectors that will contribute the most to job growth will be health care (about 5,070 new jobs), retail (almost 4,700 new jobs) and professional services (4,400 new jobs), according to the Weldon Cooper forecast. The report predicts that professional and technical services jobs will represent 11% of the state’s workforce by the end of the year.

The industries that face a challenging 2025, though, are information services, manufacturing, and mining and logging. The information services sector will lose about 141 jobs over the next year, according to the forecast. While manufacturing is expected to lose fewer than 100 jobs by the next quarter, the industry will lose a predicted 847 jobs by the end of 2025.

The mining and logging industry might see short-term job increases in early 2025 because of its seasonal cycle, but the forecast predicts it will lose 67 jobs this year, a 0.9% annual decrease.

The forecast released Monday is the first of a quarterly series that will track the state’s economic trends from 2024 to 2050. A team of Weldon Cooper economists, including Executive Director Eric Scorsone, João Ferreira, Terry Rephann and Matt Scheffel, developed the forecast in collaboration with Michael L. Lahr, a professor at Rutgers University.