MORGANTOWN, W.Va. (AP) — West Virginia appears to have emerged from a recession, West Virginia University researchers said Monday.
The university said in a news release that economic indicators show the recession likely ended during the second quarter of this year, based on slight gains in the Mountain State Business Index in June and July. The index combines seven economic indicators to measure the expected swings in the state’s economic activity.
The university said the index has increased in three of the past four months. However, the state economy remains relatively weak. And the fallout from devastating floods in late June could weaken conditions further.
But WVU Bureau of Business and Economic Research director John Deskins says there is “very guarded optimism” for slow economic growth in the months ahead.
“We are gaining confidence that our recession is now over and that our economy is stabilizing,” Deskins said.
West Virginia’s seasonally adjusted unemployment rate fell two-tenths of a percentage point in June to 6 percent, down from 7.1 percent a year earlier, according to WorkForce West Virginia.
WVU bureau research assistant professor Brian Lego said flooding in central and southern West Virginia “will likely weigh on the state’s overall economic performance to some extent over the near term, as residents in these areas deal with the fallout associated with the widespread destruction of businesses, homes and infrastructure.”
Economic activities in the state deteriorated beginning in the spring of 2015. The recession was largely a result of the decline in the state coal industry, where thousands of layoffs have occurred.
Lego said the state’s overall growth potential remains limited. He said the state’s coal production this year will likely fall to the lowest level in a non-strike year in several decades, while production in the state’s natural gas industry has waned and it will see volatility persist into 2017.