Virginia Beach-Norfolk Economy: Navy, Ports, and Tourism

The Virginia Beach metro area — formally Virginia Beach-Norfolk-Newport News, often shorthanded as "Hampton Roads" — straddles the mouth of the Chesapeake Bay across southeastern Virginia and a sliver of northeastern North Carolina. It is the largest metro economy in eastern Virginia and one of the most defense-dependent metros in the country. The U.S. Navy's Atlantic Fleet headquarters, Naval Station Norfolk (the largest naval base in the world), Newport News Shipbuilding, and a deep cluster of defense contractors together anchor the regional economy.

This is a plain-English tour of how the Virginia Beach metro economy works. For the state-level picture, see Virginia Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the Virginia Beach metro economy?

For example, recent metro GDP for Virginia Beach-Norfolk-Newport News has run around $110 billion, according to the Bureau of Economic Analysis. Metro population is roughly 1.8 million, per the U.S. Census Bureau. That makes the Hampton Roads metro larger by population than 9 of the 50 U.S. states.

The biggest industries

A handful of sectors do most of the work in the Hampton Roads economy:

• Defense and Navy — Naval Station Norfolk is the largest naval base in the world, the home of the U.S. Atlantic Fleet, and the metro hosts Joint Base Langley-Eustis, Naval Air Station Oceana, and the Yorktown Naval Weapons Station. Together, active-duty military, civilian Defense Department, and contractor employment make defense the metro's largest single sector.
• Shipbuilding and ship repair — Newport News Shipbuilding (HII) builds the U.S. Navy's nuclear aircraft carriers and nuclear-powered submarines and is the largest single private employer in Virginia. A deep ship-repair and marine-trades supplier base fills the South Hampton Roads side.
• Trade and logistics — the Port of Virginia is one of the busiest container ports on the U.S. East Coast, with terminals across Norfolk, Portsmouth, and Newport News. Container, intermodal, and warehouse employment have grown sharply with the port's expansion.
• Tourism and hospitality — Virginia Beach's oceanfront, Colonial Williamsburg, Busch Gardens, and the Outer Banks gateway drive a large travel sector that runs hot in summer and softer in winter.
• Healthcare — Sentara Healthcare and Bon Secours together employ huge numbers of workers across the metro, with Eastern Virginia Medical School adding research and teaching weight.
• Higher education — Old Dominion, Norfolk State, William and Mary, Christopher Newport, and Hampton University anchor faculty and staff workforces.
• Professional services and back-office — a growing financial-services, IT, and back-office cluster, much of it tied to Defense Department contracting.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics Mid-Atlantic region. For example, the Hampton Roads metro unemployment rate has typically run close to the national average, helped by the steadiness of military and federal employment.

Virginia sets a statewide minimum wage that is above the federal floor of $7.25 and rising on a multi-year schedule. The latest rate is at the Virginia Department of Labor and Industry.

Cost of living

Hampton Roads's cost of living tends to run close to the national average, more affordable than Northern Virginia or Richmond. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $1,400 a month, with Virginia Beach oceanfront, Town Center, and Williamsburg higher and parts of Portsmouth, Newport News, and Suffolk lower. Current county-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS Mid-Atlantic region. Hampton Roads's CPI tends to track close to the national average month to month.

Taxes in Hampton Roads

Virginia has a mildly progressive state income tax with a top rate at the lower end of states that levy one. Combined sales tax in Hampton Roads is 6%, made up of the state's 4.3% base plus a 1% local option and a 0.7% regional transportation surcharge. Property taxes vary by city — the metro's independent cities each set their own rates. Virginia Beach has no city income tax. State rules live at the Virginia Department of Taxation, and you can read more about how sales tax works in our glossary.

How the Hampton Roads metro fits into the national picture

Hampton Roads is one of the most-cited U.S. examples of a metro economy built around a single federal customer. Defense Department contracts, shipbuilding awards, and basing decisions in Washington, D.C., shape regional employment more than any other factor. The metro's broad mix of port logistics, healthcare, tourism, and higher education provides some diversification, but the rhythm is set in the Pentagon.

The Navy and the port

Naval Station Norfolk and the Port of Virginia together make Hampton Roads one of the most strategically important metros on the U.S. East Coast. Federal infrastructure investments — bridge tunnels, port deepening, base expansion — flow through the region at unusual scale. Federal data on Defense Department spending by state lives at the U.S. Department of Defense, and port statistics are at the U.S. Army Corps of Engineers.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the Hampton Roads metro.