By Joy Vann
Old Dominion University, a leader in economic research, released its 11th annual today highlighting where Virginia stands regarding regional progress and the financial circumstances that affect the pocketbooks of all residents.
From Hampton Roads to Northern Virginia to Richmond to Roanoke, the report offers facts and figures that paint a picture of uncertain growth.
The causes of that uncertainty include a diminished consumer outlook, federal policies reducing the civilian workforce and continued tariffs on imported goods.
Produced by the Dragas Center for Economic Analysis and Policy in the Strome College of Business, the 2025 State of the Commonwealth Report shows Virginia, which last year was listed as the best state to conduct business by CNBC, has fallen to 4th place. The report examines why that may be and takes a hard look at the numbers to ascertain what’s on the horizon in terms of housing, inflation and employment.
“2025 has been a challenging year for many Virginians,” said Bob McNab, Ph.D., chair of the Department of Economics and director of the Dragas Center for Economic Analysis and Policy. “Cuts to federal civilian employment and reductions in non-defense spending have rippled throughout the Commonwealth of Virginia. Higher tariffs have negatively impacted the movement of goods through the Port of Virginia. Inflation remains elevated and consumer sentiment remains near record lows.”
“While Virginia’s distinctive relationship with the federal government will continue in 2026, the lessons of 2025 point to a stark reality: economic diversification is necessary to improve Virginia’s economic resiliency in the face of continued policy uncertainty,” Dr. McNab said.
The 2025 report has four chapters, including:
“Virginia’s Economy Slows as Challenges to Growth Rise.” In this chapter, researchers examine Virginia’s economy over the past decade and look at obstacles to its continued growth. Despite job growth, Virginia’s economy faces challenges due to reduced federal employment and the effect of tariffs, which are becoming more acute to the average consumer. Those consumers also face inflation as the cost of housing, gas and groceries continues to rise.
“The State of Virginia’s GO Virginia Regions.” Virginia’s nine distinct regions, based on economic development and workforce needs, are examined via population, gross domestic product, military, civilian and individual employment and income levels.
“Virginia’s Workforce: Understanding Apprenticeships.” A look at apprenticeship programs across the country leads to discussion of how such programs could play a part in Virginia’s economy.
“Is It Better to Give Than Receive? Exploring the Distributional Dimension of Virginia’s Budget.” This chapter analyzes how revenue is collected and allocated back to localities.
Over the past 20 years, the Strome College of Business’s Dragas Center for Economic Analysis has produced economic research reports for the state’s business and community leaders as they seek data to pinpoint areas in need of attention and to affect positive change. The 2025 State of the Commonwealth Report is available