At a time when many businesses are faced with huge losses and some even have gone bankrupt, because of the sluggish national economy, Northern Virginia businessman Clifford Brown has moved his iron works company into larger quarters and plans to expand his staff from 40 to 60 persons.
Like Brown's business, Hallmark Iron Works, Inc., 60 other manufacturing firms are expanding and another 52 businesses plan to move to Virginia this year, state officials said. This is expected to add 11,000 jobs to the state's economy.
These new and exapnding businesses seem to illustrate a continuing steady economy in Virginia - a state that generally has had a slower inflation rate, lower unemployment and more jobs than most other states.
"The situation in Virginia has been pretty much the same," said William Mezger, assistant director of manpower research for the Virginia Employment Commission. He said statistics show that for the first nine months of last year, Virginia was ranked 10th among states with low unemployment rates.
The state's unemployment rate is 5 per cent, much less than the national level of 8.1 per cent.
However, because of a shortfall in sales tax and individual income tax collections, state officials have projected at least a $118.5 million deficit in the current two-year budget.
The Virginia General Assembly now in session will have to decide whether to raise taxes or cut state spending to meet the projected deficit. Some state legislators have said that they expect a tax increase on personal income or retail sales. But this may be difficult because all 100 members of the House of Delegates face elecions this year.
But despite the huge projected deficit and the slight drop in the state's economy, state officials and some businessmen, like Brown, are optimistic.
"I think it (the economy) has to grow," said Brown, the president of Hallmark, which is located at 8811 Telegraph Rd. in Lorton.
Brown said he decided last year to move his company, which fabricates metal, out of a cramped office into a larger, more spacious building. The iron works company has been operating in Northern Virginia for the past 10 years, he said.
"It's a risk if the economy gets worse," Brown said. "If it gets no worse, we will be all right."
Hallmark gets its business from government and commercial building contracts, Brown said. Because of the decline in housing construction, he said the company stopped doing residential jobs about five years ago.
More manufacturing firms, like Hallmark , are expanding or moving to Virginia this year, creating more jobs. According to Mark Kildufl, an economist for the state industrial development division, 113 businesses have announced plans to expand or move to Virginia, which will provide 11,000 new jobs. Kildufl said that the state averaged between 13,000 and 14,000 new jobs a year before 1973. That year, Virginia gained 19,000 jobs. However, he said that figure dropped to 8,000 in 1974 and 7,000 in 1975.
But, while companies such as Time-Life Books, Inc., and Mobil Oil Corp. have moved or are planning to move major facilities and employment centers here, some companies have curtailed plans to expand.
Volvo, the Swedish car maker, planned to build a $100 million plant, employing some 3,000 persons by 1980, in Chesapeake. However, company officials last month said they will postpone the beginning of production at the nearly completed plant for at least one year because of the slumping auto market and the rising cost of petroleum products.
Leland E. Traywick, a forecaster at the College of William & Mary's Bureau of Business Research, said the delay in the start of production at the Volvo plant "will hurt the local area." However, Traywick said the state's economy should not be drastically affected by the delay of the Volvo plant.