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A recent Community Conversations visit to southern Virginia gave Richmond Fed leaders an opportunity to hear firsthand how business and community leaders in the area are striving to celebrate their community’s rural character while capitalizing on economic opportunity.

The trip focused on the counties of Halifax, Charlotte, Mecklenburg and Brunswick. Once the most-populous part of the state, in recent decades southern Virginia has experienced the triple declines of tobacco, textiles and furniture manufacturing, dramatically changing the region and resulting in pockets of distress.

Richmond Fed President Tom Barkin and Renee Haltom, the Bank’s regional executive for Virginia, left their two-day visit impressed by collaboration in the region and the many areas of momentum in the regional economy.

“While retaining workforce, rebuilding downtowns and attracting business are top-of-mind issues in most of southern Virginia, the leaders in towns like South Boston and South Hill who met with the Bank team also lauded the things they love about small town life,” Haltom said. “It was wonderful to experience how they are working to enhance quality of life in the region while embracing the benefits of smaller town life.”

The visit kicked off with a discussion with timber producers in Alberta, Virginia, who shed light on how the historic lumber price swings that made headlines during the pandemic have limited their capacity to expand while they also grapple with rising production costs.

A roundtable with tobacco growers covered similar ground, with farmers and business owners noting cost and commodity price surges familiar to many sectors, as well as the additional challenge of regulations tied to the tobacco industry.

Leaders in both the timber and tobacco industries shared a workforce challenge common to many rural businesses today: Despite higher wages being offered to attract employees, the escalating costs of gas, housing and childcare have led to many jobs remaining unfilled. These problems are only heightened in rural areas because of the distance often required to drive to work and the greater challenges in providing basic services where there is less density.

“In some cases, these factors have led workers to drop out of the labor force entirely,” Haltom said. “These issues are not specific to southern Virginia, of course, but this trip really helped crystalize for us how much the inflation challenges of the last year have affected rural areas in a unique way.”

Community leaders also noted that the demand on foodbanks has increased by 30 percent over the past two years. A roundtable discussion in Brunswick County highlighted how local leaders are uniting food growers, food banks and others to create a regional foodbank system that can provide greater scale to address the issue.

There is an abundance of federal funding available to assist with initiatives like this, Haltom said, but a bottleneck for small towns is having a lack of capacity to develop grant applications and processes that are thorough enough to meet the criteria.

Barkin and Haltom also learned about workforce development initiatives aimed at developing talent in the region, including partnerships between a higher education center and two community colleges, and strategic investment into programs called career academies, through which middle school and high school students can learn on the same machinery and equipment that local businesses use. Workforce leaders are hoping this hands-on experience will encourage more young people to consider these businesses as career options.

While the region is nurturing these and other workforce development assets, they are equally focused on developing downtown spaces and amenities, and on expanding broadband, to encourage young adults to remain in the area.

“They are facing the challenge that many rural areas face – young people want to go where there is broadband and more opportunities to dine and shop past 5 p.m.,” Haltom said, noting that many young professionals from the area often resettle in Durham, North Carolina, just over an hour away.

Other efforts to make the region more attractive have included raising the sales tax in Halifax County to fund a new high school, the opening of a new hotel and two new restaurants in South Boston, and efforts in South Hill to establish the town as a quaint destination. Barkin and Haltom also visited leaders of a growing Microsoft datacenter in Mecklenburg County, which has added jobs and investment to the region.

“In all of these efforts, we found incredible pockets of collaboration among community leaders who are realistic about their challenges while understanding very well how to make progress and enhance the benefits of being smaller,” Haltom said.