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Regional report: Health care, manufacturing defied recession

By Joe Beck -- jbeck@nvdaily.com
Health care, social assistance, manufacturing and tourism led the Northern Shenandoah Valley's economy through the worst of the recession, according to a report released Friday by the Warren County-Front Royal Economic Development Authority and the Northern Shenandoah Valley Regional Commission.

The study, compiled by Robert Annan, a student at Shenandoah University's Byrd School of Business with help from his advisor, Giles Jackson, shows that each of the four leading business sectors grew at least five percent between 2009 and 2011.

The study also cited data from the Virginia Employment Commission that shows clerks, machinists, and postal workers among those with fading job prospects in the region.

The good news in the report showed four of the region's five counties with unemployment rates significantly lower than the national rate of 8.6 percent during the final three months of 2011. They show Warren at 6.2 percent; Shenandoah at 6.5 percent; Frederick at 5.7 percent and Clarke at 5 percent.

Page County's 12.1 percent unemployment rate was the lone exception to the regional trend.

As of February 2012, health care and social assistance had the most job openings of any business sector in four of the region's five counties, according to the study. Clarke County was listed with "other services" as its leader in job openings, making Clarke the lone exception to the other counties' high number of openings in health care. Manufacturing with a payroll of about $4 million showed the highest annual payroll.

The report describes health care as the economic sector likely to be experience the largest growth in jobs in the next decade. Examples cited include nursing, physical therapy, mental health, athletic training and dentistry.

"With an aging baby boomer generation, there be more and more demand for health assistance and health products," the report concludes.

The report found that despite the relatively low unemployment rate, the region is falling short of meeting the demand for jobs among several common occupations: secretarial, administrative, clerical, bookkeeping, auditing support, construction, freight and stock holders, electricians and network systems administrators.

The report attributed the slack demand in those fields to a combination of "highly honed computer skills" needed in many workplaces today and a "slowdown in the economy and construction industry in general."

The study also highlighted the importance of entrepreneurs in the growing sectors of the economy and the effects of high numbers of commuters among the region's communities.

"Bringing those people home to work and live is important in stabilizing local economies and cultures," the report said. "In order to strengthen and sustain economies, communities should prepare to assist entrepreneurs in every way."

The study called for the creation of a regional business incubator or smaller, satellite incubators to help breathe life into new businesses.

"A feasibility study could be conducted and returns on investment defined as this initiative moves forward," the report states. "Additionally, a relationship with local colleges, universities and research centers is also instrumental in supporting a successful incubator program."

The report cited shared space and resources, mentorship and communication among entrepreneurs as some of the main ways an incubator could help businesses in their infancy.

The report said data from incubator business managers show that 80 percent to 90 percent of incubated companies remain in business after their first five years.

"This is in contrast to the Small Business Administration statistics that find only 50 percent of start-ups (in general) survive the first five years of operation," the report said.

The study also called on public schools to explore programs that introduce students to entrepreneurial ideas and practices, thereby encouraging them to one day contribute to business development in their communities.

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