What’s next?

Pandemic reveals strengths, vulnerabilities of state’s economy

Published March 1, 2021 by Kate Andrews

Rendering of The Helix. Photo courtesy Amazon — In February, Amazon unveiled an expanded design for its HQ2 campus under construction in Arlington. Rendering courtesy Amazon.com Inc.

This time last year, Virginia’s fortunes seemed as high as Clemente Development Co. Inc.’s proposed 600-foot Iconic Tower.

Part of Clemente’s long-planned, 3-million-square-foot The View at Tysons mixed development, the Iconic Tower was to be the tallest commercial structure between Philadelphia and Charlotte, North Carolina.

But then the coronavirus pandemic hit and now Clemente has hit pause on the project until it becomes clear what the post-pandemic demand for office space will look like.

Once again named the No. 1 state for business by CNBC in summer 2019, Virginia was sitting atop a peak of prosperity before COVID-19.

But a year after the first lockdown, the pandemic’s resulting economic downturn has had many industries, such as restaurants and hospitality businesses, facing a precipice. More than 65,000 Virginians remain unemployed after nearly 12 months.

The coronavirus has decimated Virginia’s tourism sector, particularly restaurants, amusement parks and hotels. Brick-and-mortar retailers and small business owners across many industries continue to struggle, and essential questions remain in many industries.

On the positive end, however, government contractors continued to win lucrative federal contracts in 2020, and construction companies had plenty of work in the pipeline last year. Virginia’s data center boom continues, and the market for distribution centers and warehouses has grown exponentially.

And even though Virginia and the nation are only in the early stages of vaccinating people against the virus, we are already speaking in terms of “before” the pandemic and “after.”

Key questions remain to be answered, however: How many people will continue to work remotely after herd immunity is achieved, and will business travel and large conventions be as big a part of work as they were in the before times? What will be the impact on small businesses in central business districts? And what will happen in rural areas that may not spring back as quickly as large urban centers?

Many Virginians will return to something similar to pre-pandemic life in coming months as more people are vaccinated. Others will start training for new careers based on new economic demands for tech workers, shipbuilders and health care providers. Others will continue working chiefly from home, with in-person meetings here and there. Some chefs and restaurant owners will reopen for full service or start new ventures.

The following pages of The Big Book take a deeper look at these trends and many other events from the last year, exploring how Virginia’s economy has performed across several key sectors, including economic development, ports and shipping, construction and commercial real estate, accounting, law, banking and finance, insurance, hotels and more. And like always, you’ll find a host of valuable, up-to-date reference lists covering everything from Virginia’s largest public and private companies to the commonwealth’s top law firms and craft breweries.