The Lynchburg skyline. Photo by Rachel Mahoney.

Last year, Virginia as a whole recovered from the traumatic 2020 pandemic shutdowns and saw its economy grow by 5.5% – enough to more than make up for those initial pandemic interruptions. In fact, Virginia in 2021 saw its economy, as measured by gross domestic product, top not only the pre-pandemic year of 2019 but the pre-pre-pandemic year of 2018.

The state’s GDP in 2021 was $505.3 billion, according to the Bureau of Economic Analysis, part of the U.S. Department of Commerce. Who knows? Virginia might have been at that figure in 2021 even without the pandemic shutting things down awhile.

Not every locality in the state, though, has seen its economy return to pre-pandemic levels. Some have not; they grew in 2021 from 2020 levels but aren’t back to 2019. Some have even seen their economies shrink to a smaller size than they were during the pandemic in 2020 – all of those are rural localities, mostly in Southwest and Southside. Most localities in Southwest and Southside have recovered and have bigger economies than they did in 2019 – but that economic growth often exists side by side with localities whose economies have shrunk.

Today, I’ll look at whose economies grew in 2021 and whose shrank. And yes, I realize we’re talking 2021 here when we’re almost done with 2022, but data collection is slow, so these figures for 2021 have just come out – hence the occasion for writing about them. If you want figures for this year, you’ll have to wait until this time next year. That’s just how it works. That means the localities I’m about to cite that are on the shrinking end of something can say, “Oh, that was then, this is now, we’ve grown in 2022.” And maybe they’re right – we just won’t know officially for a year. So we’ll work with what we have. Here are the highlights that jump out at me:

Roanoke Valley economy fully recovered in 2021; Lynchburg area did not

The map shows which localities in 2021 had exceeded their pre-pandemic economies and which ones hadn’t. Credit: Bureau of Economic Analysis Note: Industry detail is based on the 2012 North American Industry Classification System (NAICS).

The Roanoke Valley more than recovered in 2021 and now exceeds its 2019 pre-pandemic economy. The Lynchburg area, though, did not.

The BEA is freaked out by Virginia’s system of independent cities and slices the data differently than I would prefer. Where there’s an independent city with a population less than 100,000, it combines that city with a neighboring county. Why it does this, I don’t know. It doesn’t do that for counties – so while we have individual data for Highland County, the smallest county in the state, we don’t have individual data for Lynchburg. Instead, we have data for Lynchburg and Campbell County combined. Perhaps Lynchburg should take this up with its congressman because from where I sit, that makes no sense.

Anyway, here’s what we can say:

The city of Roanoke had a GDP of $6.382 billion in 2019. In 2020, that fell to $6.339 billion. By 2021, Roanoke was up again – to $6.712 billion. That’s 5.9% bigger than in 2020 and 5.1% bigger than in 2019. That seems pretty healthy economic growth in the city. (Yes, yes, I realize that GDP isn’t a perfect measure of the economy. Some people might be doing a lot better, some might be doing a lot worse, but the GDP deals with the aggregate.)

For the weird statistical reasoning I cited above, the BEA lumps Roanoke County and Salem together. (Independent-minded Salem should take this up with its congressman!) They were at $5.538 billion in 2019, fell to $5.382 billion in 2020, then were back up to $5.615 billion in 2021. You don’t need to hang on the dollar figures, just pay attention to the directional trendlines.

Now let’s look at Lynchburg – or, in BEA’s mind, Lynchburg and Campbell County.

In 2019, they had a combined GDP of $6.738 billion. In 2020, the Hill City and its adjacent county shrank to $6.305 billion. In 2021, they came back – to $6.545 billion. Bigger than 2020, but still below 2019.

We see the same thing in Bedford County next door. In 2019, Bedford County had a GDP of $1.825 billion. That shrank to $1.775 billion 2020 and then rebounded to $1.811 billion in 2021 – still below 2019 levels. Bedford is a big county, pulled in a lot of different economic directions. The western part is aligned with Roanoke, the southern part is along Smith Mountain Lake, the eastern part is tied with Lynchburg. Generally speaking, though, the population weight of Bedford shifts east toward Lynchburg.

Meanwhile, Amherst County to Lynchburg’s north shows the same trendlines. The 2019 GDP was $737 million. The 2020 GDP fell to $721.7 million. Then in 2021 it was up to $726 million.

Bottom line: No matter how you configure the data, Lynchburg and its adjacent counties all show the same trend: They rebounded some in 2021 but none returned to their pre-pandemic levels. Why is this? That answer would require more analysis, but it seems to align with last year’s State of the Commonwealth Report by Old Dominion University, which cited various economic measures showing slow economic growth in the Lynchburg area. I know many community leaders in Lynchburg didn’t like that report – I heard from some of them – and they probably won’t like this one, either. But this is what the numbers show. Don’t shoot the messenger. Here are two different reports, drawn from different sets of data, that show the economy in the Lynchburg region isn’t growing as fast as elsewhere. Seems to me that’s a useful thing to know. 

Again, I must stress: It’s entirely possible that in 2022 the Lynchburg area’s economy grew and now exceeds its pre-pandemic level. If that’s the case, though, it got there at a slower rate than any other metro area in Virginia. So, put more directly: The Lynchburg metro was the only metro area in Virginia in 2021 that had not yet gotten back to its pre-pandemic levels.

The BEA doesn’t compile data by metro areas but we know where they are, so you can do your own math. Within the officially designated Lynchburg Metropolitan Statistical Area, every locality except one in 2021 was still below its 2019 level. That lone exception was the smallest one – Appomattox County.

You might think that Bristol-Washington County would be the slowest growing, since it’s on the edge of the coal counties, with their long history of trouble. Not so, though. Bristol-Washington County grew from 2019 to 2021. Not by much, but still some economic growth. Not only is the larger Bristol-Kingsport-Johnson City MSA growing, but the Virginia side of that alone saw economic growth, making Lynchburg’s slower rebound all the more curious.

Now let’s look at some other places.

Danville, Martinsville economies are growing

Danville-Pittsylvania County and Martinsville-Henry County are two communities long associated with economic despair following the collapse of traditional employers – tobacco and textiles in Danville, textiles and furniture in Martinsville. Here’s data, though, that shows those communities not only have growing economies, but in 2021 were back above pre-pandemic levels.

On a percentage basis, the GDP growth in Martinsville-Henry County is particularly impressive – 6.5% coming out of the depths of the pandemic. For comparison purposes, that’s not only higher than the state average of 5.5%, it’s higher than the growth rate in Arlington (5.9%), Virginia Beach (6.2%) and even Fairfax County-Fairfax-Falls Church (6.3%). Something is clearly happening in Martinsville, so we’re grateful to The Harvest Foundation for awarding us a three-year grant to fund a reporter in Martinsville who can help tell the story of whatever’s happening there. He’ll start in January; more on him later. For what it’s worth, we’d love to have a reporter on the ground in Lynchburg, too, but don’t yet have the funding for that. If you’d like to help us out, here’s how.

Alexandria, Henrico haven’t fully recovered, either

Some curiosities: You’ll see in the map above the geographic distribution of which localities are now back above their 2019 levels and which ones aren’t. Not surprisingly, most of the localities that haven’t made up their pandemic losses are in rural Virginia or, in the case of Lynchburg, surrounded by rural localities. Two exceptions stand out, though. Alexandria and Henrico County are in the same position Lynchburg is. They’ve come back, just not all the way. Their sluggishness stands in contrast to other localities in their same metro areas that are back above 2019 levels. Richmond, Chesterfield County and Hanover County came back faster than Henrico County; Arlington and Fairfax County came back faster than Alexandria.

Some rural areas do well, others don’t

Not all rural localities are in an “oh, woe is me” category, either. A number of them posted some of the highest growth rates in the state. Now, it’s easy to record big growth in percentage terms when you’re working from a small base. Still, some of these growth rates are pretty remarkable. Giles County saw its economy grow by 18.6% in 2021; Pulaski County next door by 15.8%. (See our previous story about what’s happening in the town of Pulaski, not to be confused with the entire county of Pulaski.) However, nearby Floyd County saw its economy shrink by 0.4%. Our economic growth is unevenly distributed, but it’s not as simple as to say it’s an urban/rural split – some rural counties have growing economies, some don’t.

A few localities have shrunk since the pandemic

This map shows in red which localities in 2021 saw their economies shrink even smaller than the pandemic year of 2020. Those in blue have grown, although, as we saw in the earlier map, not all were back to their pre-pandemic levels. Credit: Bureau of Economic Analysis. Note: Industry detail is based on the 2012 North American Industry Classification System (NAICS).

Now we come to the harder cases. I just tipped you off to one – Floyd County. It’s one of 13 localities that saw their economies in 2021 shrink even below 2020 levels. All these are in rural areas. Frankly, I’m surprised that Floyd County is on the list. It’s close to both the Roanoke and New River valleys, so it interacts with both of their economies. But who am I to argue with federal data? This is what the data shows.

Lee County is an odd case. It’s one of a small number of counties (all rural) that saw their economies grow in the pandemic year of 2020. Lee’s 2021 economy shrank but remained bigger than it was pre-pandemic. Was the Age of Zoom unusually good for Lee County? Or was there some other data weirdness going on in the background?

The biggest economic shrinkage in 2021 was in Dickenson County – down 20.3% from 2020. Think about that for a minute: Here’s a county that lost a fifth of its economy in a single year.

Some localities have consistently shrunk over the years

This map shows in red which localities in 2021 had smaller economies than they did in 2018. Credit: Bureau of Economic Analysis Note: Industry detail is based on the 2012 North American Industry Classification System (NAICS).

The hardest cases are those localities that have seen their economies steadily shrink over time, pandemic or no pandemic. This BEA data goes back to 2018, so we can get a four-year sweep – 2018, 2019, 2020, 2021 – to see who’s up and who’s down over time. Not surprisingly, those localities whose economies were smaller in 2021 than in 2018 are almost entirely in rural Virginia.

Some, though, aren’t.

Lynchburg-Campbell County had a smaller economy in 2021 than in 2018. So did Amherst County and Bedford County next door. But so, too, did Alexandria, Norfolk and Roanoke County/Salem (although Roanoke was bigger). All those surprise me but again, data is data. The shape of our economic geography is never as simple as it might seem. The question “why” is always a good one. But the big question in many of these places isn’t “why is the economy shrinking?” but “what will we do about it?”

Update, 2:42 p.m.: I’ve been asked how these GDP figures square with a recent consultant’s report that contends the Bureau of Labor Statistics employment data understates employment in Lynchburg because figures for Liberty University aren’t included. I’ve asked the Bureau of Economic Analysis about this. A spokesperson tells me that the BEA’s data doesn’t rely on those labor statistics and that their GDP figures do include private, religous schools such as Liberty.

Dwayne Yancey

Yancey is editor of Cardinal News. His opinions are his own. You can reach him at dwayne@cardinalnews.org.