Chris Chmura was quoted in a recent WTVR story on the economy:

RICHMOND, VA (WTVR) - The pounding on Wall Street Thursday, which saw the Dow Jones Industrial Average take its biggest plunge in almost three years, did more than just ignite fears for investors.

Thursday's crash also revived talks of a double-dip recession.

"Yes, we may have an elevated possibility of a recession," said Dr. Chris Chmura, President and Chief Economist at Chmura Economics and Analytics.

"There's maybe a 20 percent probability," she added. "But we're not looking for a double dip. At this point in time, we're expecting the consumer to come back."

Roughly 60 percent of our country's GDP comes from consumer spending, and that well is starting to run a little dry. 

Personal spending fell .2% in June, the single largest month-to-month drop since the fall of 2009.

"People are not going to go out and buy because the government wants them to, and they're not going to go out and buy to help out the economy," said Clarence Thomas, a VCU professor doing some shopping at Target on Friday afternoon.

"They're gonna go out and buy when they feel on an individual level that they can do it," said Thomas.

Many Americans- including Richmonder Todd Roland- are taking their income and saving it, or using it to pay off debt.

"I don't know if [the economy is] getting worse, but things are not getting better," said Roland as he put fuel in his truck.

"We're trying to get out of debt because we fear we don't know what the future holds. We're trying to save money and get out of as much debt as possible, like I think a lot of people are."

Dr. Chmura called consumers "a huge driver in our economy," and she said "they basically stopped spending in the previous quarter."

Nonetheless, Chmura believes the building blocks are there for growth in the near future. 

"I think there's enough momentum, and also with the lower interest rates and the lower gasoline prices...we'll see growth in the coming quarters."

An economic impact study recently performed by Chmura Economics & Analytics was mentioned in the Richmond Times-Dispatch article Picasso exhibit had a nearly $29 million impact in Virginia:

An exhibition this year of renowned artist Pablo Picasso's works at the Virginia Museum of Fine Arts produced an estimated $26.6 million economic impact in the Richmond region, according to a study scheduled to be released today.

That's a better return than the $25 million in economic activity that museum officials estimated the landmark exhibit would generate. The show, which ran from Feb. 19 to May 15, brought more than 230,000 visitors to the museum, a record number for a single exhibit.

Visitor spending and other activity associated with the exhibit generated an additional $2.3 million elsewhere in Virginia, for a total economic impact on the state of almost $29 million, according to the study by Chmura Economics and Analytics, an economics research and consulting firm in Richmond.

"Any way you look at that number, that is a lot of money," said Alex Nyerges, the museum's director.

Nyerges called it a highly successful return on what was a "risky" venture for the museum when it agreed in early 2010 to become one of only three U.S. museums — and the only East Coast venue — to host the exhibit.

"You're talking about a $5 million exhibition for which we had zero funding the day we said yes," Nyerges said.

Corporate, individual, and foundation donors stepped forward to provide $2.7 million in support for the exhibit. The show brought in about $2.6 million in ticket sales for the museum and about $1.4 million in gift shop and restaurant sales.

"Without the corporate and individual supporters, we could not have done this exhibition," Nyerges said.

The museum brought in $1.1 million in new membership fees from January to mid-May and its membership numbers reached a record 40,000 households.

The show, "Picasso: Masterpieces From the Musée National Picasso, Paris" featured 176 works from throughout Picasso's career. The exhibit has been on a seven-city international tour while its permanent home at the Paris museum is closed for renovation and expansion.

The Seattle Art Museum reported in January that the exhibition attracted 400,000 visitors during its showing there from Oct. 8 through Jan. 17. That broke all attendance records for the museum, which also saw its new memberships reach a record high.

The exhibition drew 314,000 visitors in Helsinki, Finland, last year. Helsinki's metro population is about 1.3 million, comparable with the Richmond region.

About 85 percent of the visitors to the VMFA exhibit were from Virginia, and the same percentage made day trips instead of staying overnight. Visitors spent an average of $50.20 in the Richmond area and a total of $55.50 in Virginia on food, lodging, transportation and retail shopping, according to the economic impact study.

The spending data is based on a survey of 404 people who attended the show.

The overall economic impact figures also include other factors such as the $1.8 million the museum spent in Virginia, including $1.6 million in the Richmond area, on marketing and support services for the exhibit. It also includes the estimated economic ripple effects of spending by visitors in creating other demand in the local economy.

The study estimates the show generated $933,000 in local and state tax revenues.

Nyerges said he thinks the biggest long-term impact from the Picasso show will be to help boost the Richmond area and Virginia's image as a historical and cultural destination.

"I think the more important result of Picasso is something that I think Richmond and Virginia need more of, and that is an impact on our belief in ourselves," Nyerges said. "I don't think we — meaning Virginia and Richmond both — have enough confidence in ourselves and our abilities yet. We have it all right here — great cultural attractions, quality institutions, great collections."

Museum officials believe the show brought visitors from every state. Nyerges said almost 50,000 people came from the Washington area.

Many Richmond-area hotels offered overnight package deals for people attending the exhibit. The Jefferson Hotel in downtown Richmond booked 815 packages that included accommodations at the hotel, a traditional Southern breakfast for two, breakfast gratuities, two tickets to the exhibit and valet parking.

"We did find the majority of our packages were booked by residents of (Virginia)," said Jennifer Crisp, public relations manager for The Jefferson. "We did see quite a bit from D.C., which is fairly normal with a package of this type.

"Certainly we did see visitors from New York, Philadelphia, Raleigh, Charlotte, and many of the feeder markets along the East Coast," she said.

Local restaurants also offered special discounts for people who attended the show.

For instance, Nacho Mama's in Carytown sold "thousands" of the Picasso-themed margaritas the restaurant created to serve to customers who attended the show, owner Raul Cantu said.

"A lot of people came in, obviously because of the Picasso margaritas," Cantu said. "We saw major traffic."

The restaurant is still serving the drink. "We are actually going to put it on our new menu," Cantu said.

Published: July 04, 2011 in the Richmond Times-Dispatch.

Many recent high school and college graduates are still struggling with the reality that they are in a tough labor market.

Unemployment rates are high, and it is taking longer to find a job.

The jobless rate for 16 to 19 year olds was 24.2 percent in May.

The rate for this age group is usually high because they haven't development their labor market skills yet.

Even so, a decade ago, the unemployment rate for that group was much lower — 13.4 percent. That translates into 1 million people in 2001 and 1.4 million for the most recent May.

Possessing a college degree typically gives job seekers more opportunities to find a job. The jobless rate for people age 25 and above with a bachelor's degree or higher was 4.5 percent in May 2011 compared with 2.1 percent in May 2001.

People are unemployed for a much longer time now than they were 10 years ago.

Eleven percent of all jobseekers were unemployed for a year or longer in 2010, but only 2.1 percent were unemployed for that long in 2000.

About 34 percent of the unemployed found a job within five weeks or less in 2010, according to the Labor Department, but 56.5 percent found a job in less than five weeks in 2000.

Much of the current high unemployment is due to the lingering effects of the recession.

Some of it is caused by a mismatch between skills that are no longer in demand in occupations, such as knitting/weaving machine setters.

At the same time, other occupations continue to see shortages, such as engineers. Retraining is needed for workers who have been in the workforce for some time but have obsolete skills that are not needed by today's employers.

Information is needed to help students make wiser decisions about career choices.

The JobsEQ Career Concourse, available on the Greater Richmond Partnership's Richmond Job Net, recently showed no job openings within a 50-mile radius of the city for economists or musical instrument repairers.

But 25 openings existed for computer and information systems managers, and 25 openings were for cashiers.

Although these postings change daily, new graduates and other unemployed workers may benefit from spending a few minutes on the site: www.careerconcourse.com/rjn.

How to train U.S. workers back into manufacturing jobs, a recent article on CNN.com featured a citation from data that Chmura Economics & Analytics compiled for the National Assocation of Manufacturers:

Those 20 occupations, according to data from Chmura Economics & Analytics and the U.S. Department of Labor, will provide more than 1 million jobs over the decade -- more than half of which will be in high-tech industries. And such jobs pay higher average wages than all other jobs except for those in health care and social assistance.

The presentation can be downloaded here.

A recent press release by Governor Bob McDonnell mentions a study performed by Chmura Economics:

“We have to invest in our transportation system to attract businesses, grow jobs, and protect our quality of live,” Governor McDonnell said. “Proving that this investment is benefiting taxpayers is an important part of engendering trust in our transportation programs. Just this year, we commissioned a study by Chmura Economics and Analytics, a national consulting firm based in Richmond, that indicated Virginia’s economy would expand by $13.1 billion and support 105,642 additional jobs over six years if the $4 billion transportation program we proposed and the General Assembly supported was fully implemented. This type of objective data sets Virginia apart from other states.”

Read the full press release here: Virginia Lauded as “Leading the Way” for Transportation Performance Measures in Pew Center on the States Study

An economic impact study performed by Chmura Economics & Analytics was recently featured in a Richmond Times-Dispatch article by Louis Llovio:

...

If Richmond wins the race, the city will have four years to stage the event, which would cost about $12.2 million. Kalman said he expects that money would come from public coffers as well as corporate sponsors.

Hosting the championships would be a windfall for the area, according to an economic impact study completed last month by Chmura Economics & Analytics. The study found that the championships could bring $135.3 million to the Richmond region.

According to the study, which was based in part on the number of attendees at previous world road cycling championships, Richmond would draw more than 1,000 athletes and more than 452,000 spectators from about 70 countries.

A large impact would come from the exposure Richmond would receive because of interest in the race.

About 500 media outlets from 35 countries are expected to cover the races. The coverage is expected to generate in excess of 400 hours of television watched by 300 million viewers, the study found.

...

Read the full article.

A report performed by Chmura Economics & Analytics was mentioned in a recent press release issued by Govenor McDonnell's office:

The governor continued, “All regions of the Commonwealth will benefit from 900 projects that will be funded by this legislation. They include improvements to bridges and rural roads in Southwest Virginia, new capacity and congestion relief in Northern Virginia and Hampton Roads, and rail and transit improvements throughout Virginia. A recent report by Chmura Economics shows that construction of the 900 projects will grow the Virginia economy by over $13 billion and support an additional 100,000 jobs. This transportation legislation that we are signing today is a bipartisan achievement that will benefit Virginians in every corner of the Commonwealth.”  

An economic impact study performed by Chmura Economics & Analytics was recently featured in the article Study: Millstone adds $1.2B a year to economy.

By Patricia Daddona

The Millstone Power Station, which employs 1,080 people at its Waterford complex, generates $1.2 billion a year in economic benefits, including $122 million in capital spending and tax revenues of nearly $34 million, according to a study commissioned by owner Dominion.

Dominion has been touting the nuclear complex's economic impact in Connecticut to lawmakers as it continues to fight a plan to tax its production of electricity. The company is opposing a legislative proposal that would tax the electric output of Millstone at 2 cents a kilowatt hour, or as much as $335 million a year.

Dominion has said the tax, if passed, would force the company to shut down one, if not both, reactors. Millstone's two nuclear reactors generate 2,100 megawatts of electricity, which is enough to supply about 500,000 homes.

The economic impact study by Chmura Economics & Analytics of Richmond, Va., was completed in late March. Dominion periodically reviews Millstone's economic impact on the community and decided to seek revisions of outdated figures when the tax proposal was introduced "so that we had current numbers to talk about when discussing the bill," said company spokesman Ken Holt.

"It's absolutely valuable to (Connecticut)," state Rep. Betsy Ritter, D-Waterford, said of the study. "When we look at tax policy, you have to evaluate the economic impacts. These are big numbers, so I think it needs to be part of the discussion."

Chmura found in its study that Millstone operations produce about $1.1 billion in economic benefits to the state each year, which supports 3,315 jobs. The company's capital spending alone at Millstone produces about $122 million annually in economic benefits and supports another 915 jobs, the report stated.

The study looked at both direct impact, such as jobs at the plant, as well as indirect and "induced" impacts, such as products from suppliers and workers spending their earnings as consumers.

In total, the study found that Millstone supports 4,230 jobs a year.

Over the past three years, Dominion has invested an average of $90 million annually at Millstone and is likely to continue to invest similar amounts, Chmura found.

In addition, the nuclear complex generates as much as $33.6 million a year in state and local taxes. Those estimates are conservative, relying only on tax revenues from direct impacts, according to the study consultant.

The analysis "clearly demonstrates that Millstone has a huge impact on Connecticut's economy as a whole - especially on the local area," said Holt. "Not only does the station directly support the community with spending and jobs, but that spending also creates jobs in the community."

Waterford First Selectman Dan Steward said earlier this week that Dominion represents about 30 percent of the town's tax base. The uncertainty surrounding the tax and the potential plant shutdown may already be costing the town money as it issues bonds for school projects, he said.

p.daddona@theday.com

 

By Chris Chmura 
Published: March 07, 2011

Every so often, I get a question about the manufacturing sector.

It's usually driven by concern that the entire sector is going to move offshore and that the industry is too important to our overall economy.

Employment trends certainly show the manufacturing sector is shrinking. It employed 31 percent of the nation's work force in 1940, compared with 9 percent in 2010.

Part of the decline in manufacturing employment is because of its success in becoming more efficient and productive.

Manufacturing firms in the United States invested $159.7 billion in domestic research and development in 2008, or 68.3 percent of all the domestic R&D investments made that year, according to data from the National Science Foundation.

That R&D leads to new products as well as more efficient processes.

Productivity in the manufacturing sector rose by an annual average of 3.6 percent from 1989 through 2009, compared with an annual gain of 2.3 percent for all nonfarm businesses.

With a more productive work force, not as many workers are needed to produce the same amount, which is causing some of the decline in the nation's employment base.

But more productive workers get paid more — manufacturing workers were paid an average annualized salary of $55,150 in the first quarter of 2010, compared with an average of $45,640 for all industries.

Of course, moving labor offshore also is causing part of the decline in manufacturing employment.

Some firms are moving operations abroad, where labor costs are lower.

The competitive advantage of the United States has always been our more highly trained and educated work force.

From that perspective, many manufacturing firms that remain in the United States use more highly skilled workers.

Those jobs requiring higher skills, such as a college education, account for 12 percent more of the manufacturing industry's employment in 2010 than they did in 2003. The group with the lowest skills, such as those with a high school diploma and no on-the-job-training, accounts for 9 percent fewer manufacturing jobs during the same period.

The trend toward a more highly skilled manufacturing work force tells me that the industry is transitioning toward one that is likely to show more stability in employment over time and, at some point, will begin to add employment again.

In the meantime, the Bureau of Labor Statistics forecasts that manufacturing industries such as medical equipment and pharmaceuticals will be adding jobs in the next 10 years, and the total output of the manufacturing industry will increase during the same period.

To remain competitive, we must continue to replace obsolete work force skills.

Just as the concept of movable type transformed the productivity of the printing industry, computers have transformed the look of the production floor as well as the type of worker needed.

~Chmura Economics and Analytics Report Highlights Impact of Governor’s Transportation Plan~

RICHMOND – Virginia’s economy would expand by $13.1 billion and support 105,642 additional jobs over six years if the Governor’s transportation plan passed Feb. 27 by the General Assembly is fully implemented, according to research conducted by Chmura Economics and Analytics, a national consulting firm based in Richmond. 

Chmura’s research calculated the impact of the proposed 900 projects to the economy of the Commonwealth, including construction spending, ripple effects and job creation. Of the $13.1 billion in total impact, $7.2 billion is direct construction spending while $5.9 billion represents the ripple effects. Benefits generated by the projects would exceed costs and would have an average economic impact of $2.2 billion and support 17,607 jobs annually through 2017. 

Additionally, the result of the transportation investment would generate $119.8 million in tax revenue for the state, and $10.4 million of benefits for local governments over that same period. The report goes on to say the long-term benefits of transportation investments include time savings for businesses, vehicle maintenance savings and accident reduction. 

“Our transportation plan is aimed at putting Virginians back to work improving our transportation network,” said Governor Bob McDonnell. “This analysis by a nationally recognized economic firm reinforces that our program—the largest influx of transportation funding in a generation—will not only address the needs of the aging highway system upon which we all depend, but it will also provide a needed injection of funding into our economy to spur recovery from the difficult recession of the past several years.”

“The time is now for these transportation investments,” said Sean T. Connaughton, secretary of transportation. “Construction bids are coming in well below estimates, and interest rates are very low. Responsibly advancing bond sales and accelerating projects can bring tomorrow’s transportation improvements to citizens today.”

The 900 projects would be funded under the multi-faceted approach that creates a Virginia Transportation Infrastructure Bank, accelerates the sale of $3 billion in pre-approved state bonds, and issues $1 billion in federal Grant Anticipation Revenue Vehicles (GARVEE) Bonds to finance federal projects. The program also encourages private entities to enter into agreements to construct, improve, maintain and operate transportation facilities. 

The 900 proposed projects in the program include bridge, tunnel and corridor improvements to interstates, highways and local roads throughout the Commonwealth in urban and rural areas. 

The illustrative project list valued at $4.4 billion is available at http://www.virginiadot.org/news/resources/Statewide/sectran/Combined_Master_1-13-11_V10_SOT-No_Phase.pdf

The full report “Economic and Fiscal Impacts of the Construction Phase of Transportation funding in Virginia and its Regions” is available at http://www.virginiadot.org/news/resources/Statewide/sectran/Plan_VDOT_Executive_Summary.pdf