NORFOLK, Va. — Two Old Dominion University economists predicted a challenging 2026 for the Hampton Roads economy at their annual State of the Region.
Dr. Bob McNab and Dr. Vinod Agarwal gave their presentation inside Chartway Arena Wednesday afternoon.
The two shared statistics and trends at the national, state and local level to support their predictions that the regional economy will grow at a slower rate in 2026.
They estimate the Hampton Roads Real Gross Domestic Product (GDP) will grow at a rate of 0.5 percent, down from one percent in 2025. They also see job numbers decreasing by roughly 0.2 percent and unemployment ticking up from 3.7 percent in 2025 to 4.1 percent in 2026.
Agarwal says some of the challenges are the result of Trump administration policies — including tariffs leading to decreasing imports and exports at the Port of Virginia and the cutting of federal civilian jobs, as Hampton Roads has a higher percentage of federal workers than most other metropolitan areas.
ODU found federal government jobs in Hampton Roads declined by 6,500 between November 2024 and November 2025 — the largest of any sector. Manufacturing and hospitality jobs had the next biggest drops at 3,800 and 1,400, respectively.
A lack of affordable housing and flat revenues at area hotels was also found to be dragging down the economy, as is a drop in legal international migration to the area.
"If it had not been international migration, our economy would have a much slower growth in population," said Agarwal.
But not all is lost, he adds.
Defense spending is expected to go up in the coming years and Hampton Roads — with its shipbuilding industry — is in line to benefit. However, Agarwal cautions against relying too much on federal and state government funding, which is largely out of the region's control.
"The private sector needs to do its part and we need to concentrate on areas where we have a competitive advantage or where we have growth potential. Maritime industry is a good example," said Agarwal.
He also tells News 3 that cooperation between the communities that make up Hampton Roads is better now than in the past.
"We do now have more regional collaboration than we used to do. We used to talk about it before. Now, we're actually doing something," he said.
The hope is that collaboration will help the region to diversify its economy and ultimately turn around the current declining trends.
