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Richmond's Economic Changes Over The Past 30 years

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Thirty years ago this month, the first issue of Metro Business was published. Times were certainly different back then.

The region is now larger geographically and by the number of people employed. And the type of firms driving the economy has changed dramatically in the past 30 years.
In 1986, the Metropolitan Statistical Area contained nine counties and four cities. It was called the Richmond-Petersburg MSA.

Three decennial censuses later, Petersburg was dropped from the name of the metro area because its economy shrunk relative to the other localities in the area. Four counties were added to the MSA: Amelia, Caroline, King William and Sussex.

A little over 400,000 people were employed in the metro area in 1986, according to the Quarterly Census of Employment and Wages. Thirty years later, 623,923 people worked in the area in the first quarter of 2016, based on Chmura Economics & Analytics’ estimate of employment from the Quarterly Census of Employment and Wages reports.

The firms and industries that drive the economy in the Richmond area also have changed a lot over the past three decades.

Philip Morris USA was the No. 1 private sector employer in 1986 with 11,500 people in the metro area. Today, Altria Group Inc., the parent company of Philip Morris, employs the equivalent of 3,800 full-time workers in the area at its manufacturing plant in South Richmond, at the corporate headquarters in Henrico County and at a research center in downtown.

Of the other top largest private employers in the metro area in 1986, three remain as large local employers in 2016.

Virginia Electric and Power Co., which the utility was called then, employed 4,969 people in 1986. Dominion Resources Inc., the parent company of Dominion Virginia Power, now is the region’s sixth-largest private employer with 5,433 full-time equivalent workers.

DuPont employed 3,200 in 1986 and has 2,376 full-time equivalent employees this year.

C&P Telephone of Virginia employed 3,476 people 30 years ago. Verizon Communications, created after the mergers of companies including what had been C&P Telephone, had 1,700 full-time equivalent workers this year.

But three other large employers in 1986 don’t exist today. Thalhimer Bros. Inc. department stores chain, which had 2,829 employees at area stores and its downtown corporate offices, was acquired, and the stores changed its name to Hecht’s and later to Macy’s.

Reynolds Metals Co. had 4,200 local workers, but the company was acquired by rival Alcoa Inc. in 2000. Alcoa still employs some local workers through its Reynolds Packaging Group.

AT&T Technologies, which later became Lucent Technologies and then Viasystems Technologies, closed its plant in eastern Henrico. In 1986, it employed 2,583 people.
In 1986, the finance, insurance and real estate sectors were growing at a rapid pace. Richmond was becoming a financial center. I can remember walking down Cary Street about 25 years ago with an associate from Crestar Bank who looked up at the skyline with the Crestar, Signet and Central Fidelity headquarters buildings in clear view. He asked whether I thought those banks would be operating as headquarters in Richmond 10 years into the future. I don’t recall my answer. But none of those names occupies the skyline today, as larger competitors bought those banks.

Although banking is not as important in the Richmond economy today as it was 25 years ago, Signet spawned Capital One Financial Corp., which is now the region’s largest employer with 11,262 full-time equivalent employees.

And several large banks such as SunTrust, Wells Fargo and Bank of America maintain a large presence in the region.

The old strength in manufacturing has given way to health care and education. VCU Health System, HCA Virginia Health System and Bon Secours Richmond Health System round out the list of top four largest employers in the region, employing 24,077 full-time equivalent workers.

The Richmond area is changing, and the latest employment figures show that it is growing faster than the nation. The next 30 years undoubtedly will see some surprising changes that I wouldn’t even attempt to forecast.

(This article first ran in the Richmond Times Dispatch on June 6, 2016)

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