Sequestration 2013: Northern Virginia economy staying strong
Updated: March 29, 2013 - 09:54 am
After nearly a month of dealing with the federal budget cuts, the impact on the D.C. area local economy is becoming clearer.
According to the Pentagon, furloughs as a result of sequestration will hit Virginia harder than any other state, followed by California then Maryland. But thanks to additional funding from Congress, the furlough numbers won't be as bad as expected.
Congress warned of dire consequences from sequestration, but in Northern Virginia, many people see a strong economy staying strong.
In the home and heart of the defense industry, the $41 billion in defense cuts this year will no doubt have an impact. But with the slow phase-in of the cuts, with the Pentagon reducing furlough days from 22 to 14, plus a strong stock market, a low local unemployment rate, and a surge in housing, some economists believe Northern Virginia can weather the storm.
M.J. Lee, a financial services reporter for Politico, says it's too soon to determine the full economic impact of sequestration, but continued growth in areas like housing is a good sign.
"There certainly hasn't been this doomsday scenario," says Lee. "The positive news we've seen in that area speaks to the general recovery we've seen in the past few years."
Analysts stress that the true impact of sequestration won't be known for months, and that the ripple effect on defense companies in this region will be noticeable.
But George Mason University economist Stephen Fuller says, "It seems our economy is more resilient than we've given it credit for."
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