Philadelphia businesses are modestly recovering from the pandemic, Pew data show
Fewer businesses were behind on their bills and bankruptcy filings remained low, according to The Pew Charitable Trusts. But job growth has stagnated in recent months.
Philadelphia’s economy continued a modest recovery from the pandemic during the third quarter this year, though it still lagged the region and the city’s own pre-COVID employment levels, new data show.
Fewer businesses were behind on their bills compared with this year’s second quarter, and bankruptcy filings have remained low since November 2020, according to the Pew Charitable Trusts, which tracks credit and jobs data in the city. However, job growth has stagnated in recent months.
“The pandemic is driving everything in Philadelphia, just like it is everywhere else,” said Thomas Ginsberg, senior officer for Pew’s Philadelphia research and policy initiative. “We are seeing signs of businesses ready to get moving again, and it’s not showing up yet in jobs.”
As of October, the city had 8% fewer jobs than it did during the same month in 2019, before the pandemic swept the country, Pew found. That is essentially unchanged since June, which also had about 8% fewer jobs than the same month two years earlier.
Philadelphia’s job recovery has trailed the rest of the region and the nation. As of October, the city had recovered only 46% of the jobs lost from February to April 2020, according to the Center City District. By contrast, the 11-county region has regained 71% of its jobs and nationally, 82% of lost jobs were recovered.
That’s consistent with other Northeast cities, such as Washington and New York, which have also lagged their regions and recovered about half or fewer of their lost jobs. This can be explained in part by the high concentrations of leisure and hospitality jobs found in cities, said Paul Levy, the Center City District’s president and CEO.
“Our cities have become great centers for arts, entertainment, restaurants,” Levy said. “Clearly, all of those face-to-face service industries have been hit much harder than other industries.”
Indeed, Philadelphia’s hospitality industry, which was hammered by government shutdown orders and capacity restrictions, remains in shaky condition. Jobs in the sector were still well below pre-pandemic levels, with 31% fewer jobs than October 2019.
The widespread adoption of remote work is an issue, too, Levy said. With office workers still at home, there are fewer people spending money at bars and restaurants. Remote work also reduces the need for security offices, janitors, or elevator mechanics. “There is an economic impact of people making the decision to remain remote,” Levy said.
Still, there are signs of a recovery, with fewer hotels, restaurants and bars severely delinquent, or at least 31 days late, on their bills in September compared with this year’s second quarter, Pew found. And the sector has added jobs at a modest pace in recent months.
At the other end, the information sector had one of the strongest showings. Cable, internet, and phone providers had about 4% more jobs in October than before the pandemic, Pew found.
Another interesting sector was warehousing and transportation, which have grappled with supply chain bottlenecks. The share of establishments behind on their bills fell slightly during the third quarter while median credit balances rose, which can be a sign that a business is growing, taking on greater risk, or both.
The industry has struggled to hire truck drivers and other staffers needed to move goods across the country. In Philadelphia, the sector posted 6% growth in jobs from August to September, but a slower 1% estimated growth from September to October. The sector still had about 12% fewer jobs in October than two years earlier.
Philadelphia’s unemployment rate was 7.2% in October, according to a preliminary estimate from the U.S. Bureau of Labor Statistics. That’s still above pre-pandemic levels but well-below the peak of 19.5% in July 2020.
Mark Zandi, the chief economist at Moody’s, noted that Philadelphia and other cities have faced higher levels of outward migration during the pandemic, which can be attributed to remote work.
“Philly is lagging the rest of the country pretty badly,” he said of the city’s economic recovery. “The rest of the country is recovering much more.”