Outlook for 2010

For 2010 economy, glass is half empty and half full

by V. Dion Haynes

Washington Post Staff Writer
Monday, January 4, 2010

The economic outlook for the Washington region in 2010 is mixed -- with continued sluggishness in convention bookings and commercial real estate but some improvement in employment and productivity projected.

Like much of the country, the area suffered in 2009 under the recession as unemployment and office vacancy rates rose and retail sales and construction activity slowed. But the federal government, which has largely shielded the region from the full brunt of the economic downturn, is expected to help propel it into recovery.

Federal spending, the engine that drives the region, should fuel a slow but robust recovery that will materialize sooner here than in most other parts of the country, local economists say. Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, forecast that the region's economy will grow 2.8 percent in 2010 and 4.0 percent in 2011. That would surpass projections for the U.S. economy to grow 2.2 percent in 2010 and 2.8 percent in 2011.

Over the next several years, the federal government is planning to hire as many as 120,000 workers in the region for various agencies, including the Department of Veterans Affairs, the Department of Labor, and the Food and Drug Administration. The expansion would not only boost employment but also absorb a portion of the vast supply of empty office space in the region.

Jobs lost in 2009 should be offset in 2010, Fuller said, with a net gain of 23,900 positions by year's end. That number is projected to grow to 34,900 in 2011 and 42,000 in 2012.