HRPDC economist warns Hampton Roads lost nearly 12,000 jobs in 2025; tariffs and defense spending shape outlook
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Summary
Nikki Johnson of the Hampton Roads Planning District Commission told Williamsburg leaders that Hampton Roads contracted in 2025—driven by federal civilian workforce cuts—while defense spending and lower mortgage rates offer near‑term support; she cautioned tariff impacts may be delayed or muted.
Nikki Johnson, an economist with the Hampton Roads Planning District Commission (HRPDC), told the council that while the national economy showed resilience in 2025, Hampton Roads experienced a contraction largely tied to federal civilian workforce cuts.
"Hampton Roads lost nearly 12,000 jobs in 2025," Johnson said, adding that more than 6,000 federal civilian positions were eliminated in the region last year and that those losses were reflected in late data because of severance and deferred departures. She described a K‑shaped recovery: gains concentrated among higher‑income households and sectors such as health care, with softer demand in lower and middle tier tourism and retail markets.
Johnson said tariff policy introduced volatility and that the full price effects may be delayed because statutory tariff rates often overstate effective rates (many goods are exempt) and firms have absorbed some cost increases to stay competitive. She also said defense spending under the 2026 national defense authorization is a regional bright spot, and that mortgage rate declines are supporting a modest rebound in home sales nationally — though Williamsburg itself saw fewer home sales in 2025 and remains below pre‑pandemic levels.
Council members pressed Johnson on the timing and magnitude of tariff effects, manufacturing relocation prospects, housing price declines and early effects of AI on employment; Johnson said much remains uncertain, that manufacturing relocation decisions are being deferred by policy uncertainty, and that available data do not yet show AI causing broad job losses.
Why it matters: the economic outlook frames revenue projections and risk to tourism‑dependent local revenues; the council will use this regional picture in revenue forecasting and in setting CIP and service priorities for FY27.