West Virginia's economy will grow steadily over the next few years, according to the latest forecast from West Virginia University's College of Business and Economics.
However, future population trends - including the loss of younger workers to other states and a growing number of retirees - could serve to undermine long-term growth.
The business school's Bureau for Business and Economic Research unveiled its 2014 West Virginia Economic Outlook during the school's annual Economic Outlook Conference in Charleston Tuesday morning.
The report warned that the loss of younger workers and a jump in retirees could affect the state's potential growth in the future.
"If you have a shrinking labor force, that presents big challenges to the economy," said John Deskins, director of the Bureau for Business and Economic Research.
In the last year, West Virginia's economy fared better than the nation's as a whole.
Between mid-2012 and mid-2013, West Virginia added about 3,000 new jobs, and its unemployment rate and growth in GDP and per capita income all outpaced the national averages.
"We have a lot of things to be happy about here in West Virginia," Deskins said. "Overall, our state's economy continues to improve."
One of the state's biggest economic improvements in the last decade has been its growth in exports. In 2000, exports accounted for about 5 percent of the state's total economic output. Last year, that figure hit 16 percent.
"The importance of exports to the West Virginia economy has more than tripled just in the last 12 years," Deskins said.
He said much of that could be attributed to an explosion in coal exports, which have grown from 9 percent of total exports in 2000 to 65 percent in 2012.
While he didn't expect that kind of explosive growth over the next decade, Deskins said the state's export market should continue to grow at a healthy pace over time.
To evaluate future economic conditions, Bureau of Business and Economic Research economists used a statistical model that accounts for about 50 state-specific variables. Over the next year, the bureau's models predict the state will continue to experience modest growth.
"The big picture here: more good news," Deskins said. "However we do expect growth will probably be a bit slower than U.S. rate going forward."
He said that had to do less with a slowing in West Virginia growth, and more to do with acceleration in the overall U.S. economy, which has lagged significantly in recent years.
The bureau forecasts state employment will increase roughly 1 percent per year over the next five years. That compares with a national growth rate of 1.6 percent.
The professional and business services sector is expected to see the fastest growth, followed by construction and education and health services. The utilities sector is the only sector that will see losses, according to the forecast.
Despite recent troubles in the coal sector, the bureau expects coal mining employment to remain relatively flat in the coming years, while natural gas jobs will grow at about a 2 percent annual rate.
The bureau expects state incomes will rise by about 2 percent annually over the next five years.
While the state's unemployment rate has stayed about one percentage point below the national rate, a trend that is expected to continue over the next few years, Deskins said that rate is somewhat misleading.