The Metro Richmond’s economy was hit harder during the Great Recession than the state and nation, in part, because of its dependence on finance and insurance industries. Employment growth in Richmond is now outpacing all of the metropolitan areas in the state and is growing slightly faster than the nation on a year-over-year basis.
The latest data for March shows Richmond employment is 1.8% above a year ago compared with 0.0% in Virginia and 1.7% in the nation.
As of November 2013, employment in Richmond passed the peak employment level of 635,541 that was reached prior to the last recession. Since then, it has exceeded that peak by 8,599 jobs.
The nation will likely reach its previous peak this summer. With Virginia job growth stalling mainly in Northern Virginia under the weight of Department of Defense cuts in spending; it may not reach its previous peak until 2015.
Of the ten major industry sectors that economists classify firms into, the information sector grew the fastest in the Richmond metro area. Employment is up 8.8% from a year ago, but it is a small sector of only 8,700 workers. That growth translates into an additional 700 jobs over the last year.
This sector includes firms that provide information such as newspapers, software publishers, sound recording studios, and satellite communications. According to the latest information from the fourth quarter of 2013, the average wages of this sector are $60,034. That’s better than the average $46,962 for all industries in the metro area.
The higher the wages of new jobs, the more it creates a ripple effect in the economy. That is because those workers have more money to spend on goods and services in the area.
The retail sector is undoubtedly benefitting from the faster employment growth in Richmond. In fact, it experienced the largest increase in jobs over the last twelve months ending with March by adding 3,900 jobs.
Health and education services sector followed with 2,900 additional jobs. And, with the third largest increase of 1,400 jobs in the last twelve months, the finance, insurance, and real estate sector continues to recover.
The 11,600 gain in employment in Richmond over the last year occurred across most major industry sectors. Such broad-based growth points to a healthy economy. Clearly a lack of dependence on federal government spending is now favoring the RVA economy.
Christine Chmura is president and chief economist at Chmura Economics & Analytics. She can be reached at (804) 649-3640 or receive e-mail at chris@chmuraecon.com.