Job Growth Slows In Pennsylvania, But Near Future May See Change

September 11, 2001

University Park, Pa. -- With Pennsylvania and the nation currently experiencing an economic slowdown, job loss continued in manufacturing, and state unemployment rose moderately from 4.1 to 4.7 percent during the year from June 2000 to June 2001. On the plus side, employment rose in most other sectors of the state's economy over the year, says a new report jointly produced by Penn State, Verizon and the Pennsylvania Economic Development Association (PEDA).

Also, many Pennsylvania counties, especially in the southeast, still enjoyed low unemployment as of June 2001.

"Forecasts by the Verizon Economics Group suggest that the current dip in the state's economic growth rate will revive in the year 2002-2003 and that a recession is unlikely," says Dr. Theodore E. Fuller, economist and co-author of "Road to 2002: An Update on Pennsylvania."

"If the forecasters are right and growth does revive in 2002-03, then recent industry and area trends in the 1990s may point to how and where growth will occur," Fuller notes. "While history may not repeat itself, radical changes in the state's economy seldom occur in the short run."

"Road to 2002" highlights employment, unemployment and population trends in Pennsylvania in the 1990s, with emphasis on recent change from June 1998-June 2000.

"The big picture for the decade shows the state trailing well behind the country at large in terms of population and employment growth. Pennsylvania's population grew only 3.2 percent versus 12.8 percent nationwide," says report co-author Dr. Stephen M. Smith, professor of agricultural economics at Penn State and director of the Center for Economic and Community Development in the Department of Agricultural Economics and Rural Sociology. "During the same period, employment expanded just over 10 percent, compared to nearly 20 percent across the United States."

Smith adds, "The state did keep pace with the nation in reducing unemployment in the 1990s. Statewide in June 2000, the jobless rate averaged 4.3 percent versus 4.2 percent for the nation."

"Based on Pennsylvania economic trends in the 1990s, the bottom line message during the next few years -- assuming the national economy picks up speed -- appears to be that both population and jobs will continue slow growth, and that unemployment will turn down again," says Fuller. "Policywise, slow population and job growth are not a real problem -- at least in the short run -- as long as unemployment remains low and the state maintains a favorable mix of businesses which include nationwide growth industries."

An ongoing concern in Pennsylvania is how statewide population and employment trends play out among the state's 67 counties, according to Dr. Martin L. Shields, also a co-author of "Road to 2002" and assistant professor of agricultural economics at Penn State.

In the 1990s, most counties saw slow job growth, with only nine counties experiencing fast growth. Three counties, including Philadelphia County, lost jobs. In regard to population, 40 counties had slow growth and 20 experienced a decline. Unemployment fell in most counties over the decade, the report says.

Economic expansion varied substantially within the state in the 1990s. "On average, the highly urbanized counties of the southeast and southwest, centered on Philadelphia and Pittsburgh, faired better in employment and population growth and in reducing unemployment, than the rural and small-city counties in the interior of the state," Shields says.

"During the current slowdown, unemployment has risen faster in rural than in highly urbanized counties -- due likely to their greater dependence on manufacturing for jobs," he adds. "The dependence of local areas on manufacturing leaves them vulnerable to job loss, especially during economic slumps and recessions. This is no trivial matter."

Should the Pennsylvania economy pick up steam during 2002-2003, recent employment trends, statewide and nationally, indicate that service industries will continue to head the parade. During June, 1998-2000, near the end of the eight-year nationwide economic expansion, the service sector added more than 84,000 jobs in Pennsylvania. Retail trade and construction followed, creating more than 39,000 and 30,000 new jobs respectively. The two categories of transportation and public utilities and local government were next with over 18,000 new jobs each.

?Manufacturing (-18,838 jobs) and mining (-1,329 jobs) were the only two sectors to lose jobs during June 1998-June 2000, the report says.

Judging from recent industry trends in the state, computer and data processing and eating and drinking establishments could lead in job creation in the next several years. These two categories added 14,498 and 13,760 jobs respectively during June, 1998-2000. Management and public relations and personnel supply services followed with over 8,500 new jobs each.

"Road to 2002" not only details Pennsylvania employment trends in the 1990s and economic forecasts for 2002-03 but includes a guide to 26 business financing programs offered by Pennsylvania state agencies to promote economic development. The report also updates progress by Verizon in furnishing telecommunications network infrastructure and services across the state.

"Road to 2002" was prepared by Penn State's Department of Agricultural Economics and Rural Sociology, funded by Verizon and published in cooperation with the Pennsylvania Economic Development Association.

Copies of "Road to 2002" may be obtained free by contacting Fuller at (814) 863-8247 or email:tef4@psu.edu; Smith at (814) 863-8245 or email:smsmith@psu.edu; or Shields at (814) 865-0659 or email:mshields@psu.edu

"Road to 2002" is also available on web sites at www.aers.psu.edu/cecd and www.teampa.com

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Contacts:

Paul Blaum (814) 865-9481 pab15@psu.edu

Vicki Fong (814) 865-9481 vfong@psu.edu