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WILLIAMSBURG — Despite threatened federal defense cutbacks and a construction downturn, the state’s economy should continue along a generally strong course for at least the next two years, according to the College of William and Mary’s Bureau of Business Research.
In his economic forecasts for 1990 and 1991, bureau director Roy L. Pearson said decisions made by Congress in 1990 on the amount of federal spending will probably haw a
nomic health.
“If during 1990 Congress does approve substantial real cuts in future defense spending, the critical impact for Virginia most likely will be in 1992 or later,” said Mr. Pearson.
In the near future, the overall outlook is positive. In 1990, Virginia income growth will slow gently to eight percent. However, the slowdown merely matches the deceleration in inflation that is occurring across the nation, said Mr. Pearson.
After adjusting for inflation, he estimates that real Virginia personal income will increase by 3.7 percent in 1990, the same rate as in 1989. The big difference will be that income growth in 1990 will be driven more by wage gains and less by higher property income.
“That changing growth mix is a tjplus for the retail sector, since people tend to spend a higher percentage of wage gain than of property income,” said Mr. Pearson. For redelayed impact
94.3%