NORFOLK, Va. (WAVY) — Increases in tonnage at the Port of Virginia, a robust defense budget and strong performance from the hotel industry highlighted the State of the Region report at a packed luncheon Tuesday at the Waterside Marriott.
Old Dominion University economics professors Robert McNab and Vinod Agarwal detailed the trends and the data, amidst a government shutdown and effects beginning to emerge on the Hampton Roads economy from tariffs.
McNab told reporters afterward that the length of the shutdown will be a determining factor for both the economic impact and the point at which Congress can resolve it.
“What I suspect what will happen is that the pain of the shutdown — the TSA lines, the air traffic control delays, the unanswered phones at Social Security and the IRS, the trash building up at national parks — will accumulate and that anger at the lack of services will force Congress into session to do its job,” McNab said.
McNab said the tariffs here in Hampton Roads have caused less traffic at the Port of Virginia, but that’s part of a larger trends at ports across the country.
“Imports flowing into the United States nationally are down, and exports are down as well — less goods on store shelves, higher prices,” he said. “If it continues, that will slow traffic through the Port of Virginia, and that will slow economic activity in Hampton Roads and the Commonwealth as well.”
The report shows that hotels in Hampton Roads outperformed the rest of the Commonwealth and the nation from 2019 thru 2024, but it warns that Airbnb and Vrbo are bringing strong competition.
Tonnage at the port in 2024 increased to nearly 27 million tons of general cargo — a record after a short-lived dip in 2023.
The 2026 defense budget increased again to more than $900 billion, but McNab warns that we can build ships only up to the limits of our capacity. As war fighting modernizes, so does its needs.
“The question at the end of the day — what is going to be built?” McNab said. “What we’ve seen in the Russia-Ukraine conflict is that the nature of warfare is changing. Drones are rapidly changing the battlefield. What used to be a dominant platform for ships is now being challenged by drones.”
