CHARLESTON, W.Va. — The state’s business index has been flat for the past three months — suggesting “there may be some hope” for the state’s economy, according to a report released by economists at West Virginia University.
The Mountain State Business Index for May was unchanged. The report indicates the economy is in a recession, but that there could be a turning point in the near future.
“We don’t have a hard and fast statistical rule, but it certainly gives us some optimism,” said John Deskins, economist at WVU’s Bureau of Business and Economic Research from Monday’s MetroNews “Talkline.”
Contributions to the overall index for May included declines in initial unemployment insurance claims and the trade-weighted dollar. In April, there was an increase in natural gas production, a decline in coal production and an increase in stock prices for the state’s largest publicly-traded employers.
Deskins said the index is a representation of the overall state even though there are economic variations from county to county.
“This index is somewhat misleading because it’s intended to capture the entire state economy, but we have such dramatic differences across West Virginia,” he said.
Boone County, for example, has particularly felt the impact of the struggling coal industry, Deskins said. He called it a “lag effect” that began with a loss of coal production, then loss of coal jobs, which resulted in more job losses countywide.
“More broadly in the state that may not be such a hard and fast rule, but definitely in those communities that are most effected — you see that pattern,” Deskins said.
After an economic free-fall during the past year, Deskins said that’s a sign of optimism.
“We think it’s a bottom you’re going to cycle up from because we think the decline in coal is coming to an end,” he predicted.