Wednesday, September 24, 2014

Economic Outlook

Kamran Afshar, Ph.D., Chamber Economist 
The Chamber’s Finance Committee
610-691-3272 •

Local businesses are planning to hire a lot more people in the next 6 months

The Kamran Afshar - Greater Lehigh Valley Chamber of Commerce survey of Lehigh Valley businesses is done on a quarterly basis and collects about one thousand observations per year. The Employment and Purchasing Index for the Lehigh Valley highlights the results of these surveys. 

In July 2014, we conducted our 59th survey of this series which recorded continued cautious optimism in the local economy. 

Who do we survey? We survey businesses large and small and in a variety of different lines of business; around a third of our respondents are businesses with less than 6 employees. Half of the respondents have between 6 and 50 employees, and a quarter of our them have more than 50 employees.

The average business participating in the survey hired 0.7 new employees in the last 6 months. Local businesses have also raised their hiring levels from around 0.4 employees, which prevailed between 2012 and 2013, to 0.7 employees as of July 2014. 

When it comes to how many people you are planning to hire in the next 6 months, the picture improves even further. The average participant in the survey is planning to hire 1.1 new employees in the next 6 months. This is a significant increase and promises higher employment levels for the 2014 and 2015, which makes the outlook  positive. Something we haven’t seen since 2007.

The largest gain in July was in the index of plans for future expenditures, this index soared by 12.5% over its April level. This is the third highest level for this index since the 2007.

Participants’ expectations of the future rose by a strong 10.9%, while their assessment of the past recorded a slight drop in July.

Based on the data over the last 12 months we expect the Valley’s economy to show moderate growth over the next 6 months. Companies with 21 to 50 employees will lead the growth, expanding at a higher rate than others, and employment to show significant increases over the next 6 months.

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