The federal government job sector continues to shrink in the D.C. area, but local economic experts say that will not do much to slow economic growth in the region. The Northern Virginia Association of Realtors held its annual Economic Summit at George Mason University last week, and the news looks good for Northern Virginia and its surrounding suburban neighbors.
"Federal jobs will shed about 22,000 in the next few years, but mostly through attrition,” said David E. Versel, Senior Research Associate for the George Mason University Center for Regional Analysis (CRA).
While such shrinkage will make headlines over the coming months, the actual effect on the local economy will not be that great because the regional economy is in transition, according to Versel. In the past, it relied heavily on federal spending, and now it is more diverse, full of national and international corporations which have moved to the region because of its well-educated and skilled labor force.
In 2010, federal spending and wages accounted for 39.8% of the local economy, according to CRA. By 2017 that share will drop to around 29% while local and non-local private sector businesses will increase from 36% to 44% – which can help insulate the local base from relying on just one major income generator like the federal government.
Keeping in mind that houses are where the jobs go at night, the loss of federal jobs will not necessarily have an adverse effect on the local housing market. Just looking at the numbers reveals that if anything, we are going to be facing a tighter market moving forward.
In fact, in the next four years, the federal government is the only sector losing jobs. All others are projected to increase. Various sectors will enjoy robust growth such as education/health (+10%); professional & business services (+20%) and construction (+37.8%).
The bottom line is that more than 280,000 jobs will make their way into the D.C. market by 2017, according to the CRA; and those who are in the market now will benefit from the appreciation that is bound to result because of the supply and demand.
Want more data or input on your personal economic situation with your home? Give us a call at (703) 821-8300 at Weichert Realtors, McLean VA, serving Virginia, Maryland and D.C.
