Virginia’s economy faces challenges with slowing growth in Hampton Roads, according to the 2026 Annual Economic Forecast from Old Dominion University economists. Factors like rising inflation, job losses, and policy uncertainty are contributing to the slowdown. Household income disparities are evident, with the top 30% outpacing inflation while the rest struggle financially.

The negative impact of tariffs and policy uncertainty has led to slower economic growth in Virginia, with data suggesting a possible recession. Rising prices of essential items like electricity and coffee are dampening consumer sentiment. Employment growth is slowing, with over 6,000 federal civilian jobs lost in Hampton Roads in 2025.

Virginia’s labor market saw a significant decline in 2025, pointing towards a potential recession. Employers are hesitant to hire, with 2025 showing the weakest job growth since the pandemic. Hampton Roads is facing a housing supply shortage, requiring reforms in zoning regulations to promote high-density developments and reduce living costs.

Defense spending in Hampton Roads is expected to increase, providing economic benefits but also posing challenges. To boost the economy, there is a need for the private sector to diversify and invest in areas with growth potential. The region must focus on developing a housing strategy and reducing regulatory burdens to support workforce needs.

Read more at GlobeNewswire: Old Dominion University Economists Share Economic Prospects