Pennsylvania Job Growth Hits Record High

October 18, 2000

University Park, Pa. -- Job growth in Pennsylvania reached its highest point in a decade during June 1998-99, while the state's unemployment rate reached a new June low for the 1990s, matching the national rate of 4.5 percent, according to a new report by Penn State and Verizon Pennsylvania Inc.

Sparked by sharp upswings in construction and retail trade, more than 100,000 new jobs were created for the second year in a row as the rate of job gain edged up for the third straight year, the report says.

The new high in job growth and record low unemployment in 1999 marked the eighth consecutive year of economic expansion for Pennsylvania. The state's track record continued to mirror the upward trend of the U.S. economy in the 1990s.

"Forecasts by the Verizon Economics Group suggest some slowing down of growth in gross state product (value of output) and job growth in the next two years, but indicate no real downturn in the state's economy," says Dr. Theodore E. Fuller, Penn State economist and co-author of "Road to 2001: An Update on Pennsylvania."

However, the report also indicates a possible "downside" for Pennsylvania in the 1990s. The state's population increased only an estimated 0.9 percent over the decade versus 9.7 percent in the United States and is projected to grow only 1.4 percent during 2000-10, compared to 8.4 percent in the country at large.

"Rapid population growth is not necessarily a desirable end in itself," notes report co-author Dr. Martin Shields, assistant professor of agricultural economics at Penn State. 'However, the state must possess an adequate supply of trained labor to maintain economic growth."

This potential problem for Pennsylvania was highlighted in a recent report on the "brain drain" or out-migration of younger college-educated workers from the state, by Dr. Gordon F. DeJong, Distinguished Professor of Sociology and Demography at Penn State.

"Road to 2001" details statewide and county changes in population, total and sector employment and unemployment plus statewide job change by industry, both for June, 1997-99 and for the decade of the 1990s.

The big picture statewide on employment change in Pennsylvania during the 1990s shows services (349,933 new jobs), retail trade (87,557 jobs) and local government (43.337 jobs) leading the way in job growth.

"During June 1997-99, services (108,147 new jobs), retail trade (35,738 jobs) and construction (29,306 jobs) have been in the forefront of job creation," Fuller says.

"During that same period, three major sectors experienced job losses: state government

(-18,124 jobs), manufacturing (-6,511 jobs) and federal government (-3,425 jobs)," he adds.

The top growth industries in Pennsylvania during June 1997-99 were computer and data processing services (15,222 new jobs), eating and drinking establishments (15,049 jobs), personnel supply services (11,908 jobs) and management and public relations (8,629 jobs).

"These industries and others have been spearheading the growth in service and retail trade," says report co-author Dr. Stephen M. Smith, professor of agricultural economics at Penn State and director of the University's Center for Economic and Community Development.

On the other hand, Smith indicated that "the industries sustaining the most serious job losses during June 1997-99 were commercial banks (-8,695 jobs), blast furnaces and basic steel products (-3,236 jobs) and life insurance (-3,169 jobs).

"Road to 2001" describes the considerable variation among counties in population and employment change and reduction in unemployment over the decade. Typically, suburban counties in the southeast and southwest, centering on Philadelphia and Pittsburgh, had the highest rates of both employment and population growth during the 1990s, and lowest unemployment rates at the end of the decade.

Rural counties, especially in the western interior of the state, tended to have slower rates of population growth (or actual declines), slower employment growth and higher rates of unemployment throughout the decade. "These counties have not participated as fully in the long-term national expansion and may be more prone to the `brain drain' of their labor force," Shields adds.

"Road to 2001" concludes with an easy-to-read detailed guide to 26 business financing programs offered by various state agencies to promote economic development across Pennsylvania. The report also updates progress by Verizon Pennsylvania Inc. in furnishing telecommunications network infrastructure and services in Pennsylvania as part of its commitment under the 1993 Telecommunications Act.

The 13th publication in the "Road" series, "Road to 2001" was funded by Verizon Pennsylvania, Inc. and published in cooperation with the Pennsylvania Economic Development Association (PEDA). The report was prepared by Penn State's Department of Agricultural Economics and Rural Sociology.

Copies of "Road to 2001" may be secured without charge from Fuller at (814) 863-8247 and by e-mail.

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Contacts:

Paul Blaum (814) 865-9481 (o)

Vicki Fong (814) 865-9481 (o)/ (814) 238-1221 (h)