Recession's Grip Hard to Shake in DC Region

WASHINGTON, DC—Although the U.S economy is booming, the DC area economy outlook is murky as economists see some positive trends on the horizon, but also predict continued low wage and job growth will dog the region.

“The national economy is booming, but there is nothing in the local economy that says we're falling in line with the national economy,” said Stephen Fuller, director of George Mason University's Center for Regional Analysis.

The region is still coming to grips with sharp reductions in government spending and the region is now looking to the biotechnology, healthcare and higher education sectors for economic growth.

“For many years, we have been a company town, and that company has been the federal government,” Fuller says. “We need a different horse to ride, but what does it look like? It's going to take a while to figure out what the reinvention might be.”

One area that economists are bullish on is suburban Maryland, while at least for the moment Northern Virginia is having its troubles filling vacant office space, according to the Washington Post.

“The stereotype — and to a certain extent, it's true— is that suburban Maryland is about the life sciences, and Northern Virginia is about the death sciences,” says Anirban Basu, chief executive of the Baltimore-based economic consulting firm Sage Policy Group. “The pace of commercialization in suburban Maryland is about to accelerate dramatically. There is going to be an acceleration of innovation, business formation and business growth, particularly in Montgomery County in the years ahead.”

Fuller and Basu say that defense industry cutbacks have hammered the Northern Virginia office market. “The Northern Virginia office market has turned negative in dramatic ways recently, and Northern Virginia is staring at a roughly 25-year high in office vacancies,” Basu says. See story in the Washington Post.