Hampton Roads should expect declines in business investment and consumer spending as the federal government looks to cut workers and implement tariffs, economist Nikki Johnson told the Hampton Roads District Planning Commission Thursday.
Hampton Roads is home to 51,000 federal civilian workers. That’s the third- highest concentration in the nation, behind New York City and Washington D.C.
Johnson said those jobs pay more than double the average of other civilian jobs.
“For every federal civilian job we cut, you would have to create two new private sector jobs to maintain the level of compensation in the region,” Johnson said.
President Donald Trump’s administration wants to slash as many of those jobs as it can to reduce federal spending. Workers told WHRO the efforts have been haphazard and are causing widespread anxiety.
But the administration isn’t just targeting jobs.
The share of city and county budgets that come from the federal government has gone up to about 11% on average since COVID-19 hit and federal agencies poured money into health, social and infrastructure programs.
But Johnson said that is expected to decline back to pre-COVID levels. The Trump administration has already begun clawing back millions in funding from agencies like the Virginia Department of Health.
She pointed out that Hampton Roads ranks fifth in the nation for Department of Defense contract spending.
The Trump administration has also implemented broad import tariffs. It’s particularly targeted China, which sends more imports through the Port of Virginia than any other country.
Johnson said lagging economic data means the exact impacts still haven’t come into focus, but economists across the country are expecting a major economic slowdown.
“We definitely are more vulnerable than other areas of the country, but it all depends on where the spending cuts, where the workforce cuts, are focused.”
