Thursday, June 15, 2017

Lehigh Valley Economic Outlook - Spring Update

Dr. Kamaran Afshar, Chamber Chief Economist, The Chamber’s Finance Committee

The Kamran Afshar- Greater Lehigh Valley Chamber of Commerce survey of the Valley Businesses is a quarterly survey that we have been doing since 1997. According to the April Survey, local business sentiment gave back some of its January gains but is still above its last October's level. The drop in April came almost entirely from the employment sector - local employers have reduced their actual as well as planed hiring since January.

The index actual hiring for the last six months dropped below its January level, giving up a lot of its January gains and dropping slightly below the range which is historically associated with faster growing in the Valley. Local employers are not only facing a smaller labor pool, but of more significance, they are facing a thinning of skills and expertise within the remaining labor market. From high-tech to low-tech to no-tech, many positions remain vacant for lack of qualified occupants.

Among those who are hiring, the transportation and warehousing industry has the lead in the number of new employees hired per company in the last six months.

The index of plans for future hiring also dropped in April. It has lost 2.4 percent of its value since last October.

Transportation and warehousing industry is again in the lead among those planning to hire in the next six months.

The index for actual purchasing over the last 6 months rose slightly over its January level; however, it is still 7.9 percent above the last April's level. This index has moved into the expansionary range since January.

 Purchasing plans for the future also recorded a small increase over its January level.

This index has also crossed into the range which is historically associated with faster growth.

Businesses participating in the survey have experienced a slight decline in their revenues over the last couple of years. However, their expected revenues for the next six months rose according to the April survey. This indicator's trend has been relatively flat.

The survey of Lehigh Valley Businesses shows that their general optimism which sprang up in January has lost some of its shine. The expenditure indices moved up in April, which is a sign of enthusiasm. However, the drop in employment indices indicate uncertainty. It appears that the more-enthusiastic January survey was amended in April with a good measure of caution.

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