Virginia faces modest recession risk as Weldon Cooper forecasts

Virginia’s inaugural economic forecast from the University of Virginia’s Weldon Cooper Center suggests the state could edge toward a modest recession, with GDP growth projected at 2.4% in 2025 but employment gains slowing and public school enrollment declining sharply [1].

Key takeaways

• Virginia’s 2025 GDP is forecast to rise 2.4%, outpacing the national 1.9% growth rate [1].
• Employment growth is expected to drop to 0.71%, adding about 30,000 jobs and leaving unemployment at 3.4%—still below the national average [1].
• Public school enrollment is projected to fall by 75,000 students over the decade, accelerating a pre‑pandemic decline [2].
• Migration patterns show continued outflow from Northern Virginia to smaller metros and rural counties, reshaping the state’s demographic landscape [3].
• Sectors such as health care, retail and professional services will drive job gains, while information services, manufacturing and mining face losses [1].

Economic outlook and labor market trends

The Weldon Cooper Center’s first quarterly forecast projects Virginia’s gross domestic product to increase 2.4% in 2025, a modest gain that still exceeds the U.S. forecast of 1.9% for the same year. Inflation is expected to moderate, with the consumer price index rising 2.6%, matching the national outlook. Employment growth, however, is slated to slow to 0.71%—a decline from the 1.7% growth seen in 2024—resulting in a net gain of just over 30,000 jobs. The unemployment rate is projected to stay at 3.4%, comfortably below the national average of 4.1% [1].

Job creation will be concentrated in health care (about 5,070 new positions), retail (nearly 4,700), and professional services (4,400). By the end of the year, professional and technical services are expected to comprise 11% of the state’s workforce. Conversely, information services, manufacturing, and mining and logging are forecast to lose jobs, with manufacturing projected to shed 847 positions by 2025 [1].

Demographic shifts and education implications

Parallel to the economic forecast, the Weldon Cooper Center’s demographic analysis highlights a continued decline in public school enrollment. The center now estimates a loss of 75,000 students during the 2020s, up from an earlier projection of 50,000, driven by lower birth rates and a pandemic‑induced shift toward private and homeschooling options [2]. Enrollment in private schools rose notably in parts of Richmond and Henrico, while homeschool enrollment statewide increased 40% since 2019.

Migration trends compound these demographic changes. Since the pandemic, large numbers of residents have left Northern Virginia for smaller metros and rural counties, a pattern that mirrors historic suburbanization. In 2023, the Winchester metro area grew at nearly five times the state rate, and the Richmond metro area recorded its largest influx of new residents ever. Rural counties saw the highest net in‑migration since 1975, though higher death rates in older populations have muted overall growth [3].