STAUNTON, Va. (WVIR) - Governor Terry McAuliffe (D) says he's happy with Virginia's economy, for now.

Wednesday, the governor gave a promising report at the Shenandoah Valley Partnership's annual meeting inside Staunton’s Stonewall Jackson Hotel.

"I feel the region's really strong," Gov. McAuliffe said.

"The economy is better than it has been. We are seeing signs of stimulation," said 20th District Delegate Richard “Dickie” Bell (R).

McAuliffe says his administration is shattering all sorts of records when it comes to job creation, but added everyone in the commonwealth needs to be on alert for some potential trouble.

"I caution everybody in Virginia, the one thing that we have to be concerned about is sequestration," warned Gov. McAuliffe.

Congress has to vote by October 1 to stop major cuts to defense spending, similar to what the commonwealth saw between 2010 and 2012, which decimated Virginia's economy more than any other state.

"Virginia is the number one recipient of Department of Defense dollars. Of all 50 states, we're number one that is going to be greatly impacted if sequestration goes through on October 1," McAuliffe said.

The governor says sequestration affects his ability to invest in areas such education and transportation projects.

In the meantime, McAuliffe announced a $61 million investment on a turkey processing facility in Rockingham County.

The governor had to walk by some protesters as he stepped out of his car at the Stonewall Jackson Hotel.

Opponents to Dominion's proposed Atlantic Coast Pipeline (ACP) stood in solidarity, chanting at times, as the governor made his way past them.

McAuliffe is supportive of the natural gas pipeline, saying it will create jobs.

"There is no route currently proposed by the ACP that is environmentally safe. So we hope he will be remembering his promise to his constituents to keep this area environmentally safe," said protester Mary Kanour.

Gov. McAuliffe did not stop to talk with protesters, but says he did notice them and they haven't changed his views.