The Observer Newspapers | Dulles is Large Part of Regional Economy

November 21, 2008

Dulles is Large Part of Regional Economy

By Christopher L. Moore

Observer Editor

Dr. Stephen Fuller, a well-known local economist with the Center for Regional Analysis at George Mason University, on Tuesday defined the new Dulles economic region and forecast growth in jobs, population and overall economic output in the area over the next seven years.

At a luncheon for the Dulles Regional Chamber of Commerce, Fuller defined the Dulles region as an area bordered on the north by the Potomac River, on the east by Hunter Mill Road and spreading south to incorporate the Route 50 corridor and west out to Leesburg. Among the communities in the Dulles region are Herndon, Reston, Ashburn, Fair Oaks, the City of Fairfax and the Route 28 corridor.

"This is not a small area," Fuller said. "The Tysons Corner area that we hear so much about is 17,000 acres, which is less than two square miles."

Fuller's population statistics were based largely on the 2000 census, which showed there were 332,054 people living in the region, more than a million in Fairfax County and about 170,000 in Loudoun County. About 30 percent of the population of both counties lives within the Dulles region.

Fuller found that the percent of the population that is college educated is higher in the Dulles region, 57.5 percent compared to 54.8 percent in all of Fairfax County and 47.2 percent in Loudoun County. More than 19 percent were foreign-born in Dulles, compared to 24.5 percent in all of Fairfax and 11.3 percent in Loudoun.

Overall, the Dulles region contains about 22 percent of all the space in Fairfax and Loudoun and about 32 percent of the businesses in both counties and about 43 percent of the jobs.

Based on 2000 census figures, the residents of the Dulles region had a total income of $12.7 billion, about $9.1 billion in the Fairfax portion of the region and about $3.6 billion in the Loudoun portion. "Even for Congress, that's a big number," Fuller said.

Fuller said about 30 percent of the income of both counties is in the Dulles region. Loudoun residents as a whole had $5.7 billion in income in 2000 and Fairfax residents had $37.3 billion.

The total number of businesses in Fairfax and Loudoun was 35,608 in 2006, according to Fuller, and the Dulles region accounted for 11,145 of those jobs, or about 32 percent of the two-county total.

About 44 percent of all businesses in the Dulles region are professional and management service industry, Fuller said, while retail accounted for about 15 percent, financial services accounted for about 10 percent, and education and health services accounted for about 9 percent.

Fuller showed that while 2001 was a year in which the national economy was in recession, the Dulles region followed the job growth of Fairfax and Loudoun. In 2002, the Dulles region lost more jobs than Fairfax as a whole or Loudoun when the tech bubble burst, but it rebounded by creating more jobs than Fairfax or Loudoun in 2003, 2004 and 2005. He said the huge job growth Dulles showed in 2003 could have been due to the growth in the homeland security industry and to the expansion of Dulles Airport.

About 45 percent of all commercial office space in Fairfax and Loudoun counties is located in the Dulles region, along with almost 30 percent of the retail space and 25 percent of the industrial space. The Dulles region boasts about 93 million square feet of commercial office space, but it also has a high vacancy rate at 19 percent.

But Fuller said the Dulles region will have an advantage when the national economy turns around and starts growing rapidly in a couple of years because it will have the office space available to house companies who need to ramp up quickly in a growth spurt. He said the vacancy rate may rise as new projects now underway are completed, but it will come down in 2011 and 2012 as those buildings are filled up.

Fuller also calculated the Dulles region's "gross area product," which is similar to the national gross domestic product but calculated solely for the region. He said the Dulles GAP increased $10 billion from eight years ago to $35 billion. Fairfax County's GAP reached $101 billion in 2008 and Loudoun County's GAP was about $18 billion.

Fuller forecasted that the Dulles region's GAP could grow to more than $45 billion in 2015, along with a 12.7 percent increase in jobs in the region and 15.9 percent increase in population in the region.

He said the region would require 24,000 new housing units to support its growing economy. "We have just absolutely enormous growth potential in Washington, D.C., and Northern Virginia," he said. However, he cautioned that the region's advantage toward future growth could be lost without substantial investment in infrastructure such as new roads and housing areas.

Fuller's presentation was the beginning of an effort by the Dulles Regional Chamber of Commerce to more adequately define the Dulles region. Fuller will be conducting other research and releasing a more detailed statistical analysis of the Dulles region's economic characteristics in the months to come.

Eileen Curtis, president of the Dulles Regional Chamber of Commerce, said the chamber would produce a map of the region highlighting key economic indicators and is looking for sponsors for the project.