The construction cranes that now dot Philadelphia are a welcome sign that some business is getting done, but the steel structures tend to distract the eye from the local economy's challenges closer to the ground.
The latest quarterly reading of Select Greater Philadelphia's leading economic indicators points to mid-2014 as the earliest point when employment in the 11-county region will return to its prerecession level.
A separate analysis of the Philadelphia market by PNC Financial Services Group Inc. recently concluded that the region will continue to lag behind the nation in economic growth, job growth, and income growth.
What's going on here? Don't we have an emerging entrepreneurial tech community, a growing business professional services sector, and an enviable cluster of top-notch higher education and health-care institutions?
Yes, and those sectors did much to ease the impact of the recession that lasted from December 2007 through June 2009. But other sectors, including manufacturing and information technology, that have been job-creating engines in the sluggish nationwide recovery are underrepresented locally.
As Phil Hopkins, vice president of research at Select Greater Philadelphia, has noted previously, the region had experienced a lower percentage of job loss and had a lower unemployment rate than the nation as a whole between the start of the recession and September 2010. However, that advantage has vanished.
About three years ago, Select Greater Philadelphia teamed up with IHS Global Insight, an economics firm, to produce its first quarterly indexes of regional indicators to measure the current health of the economy and forecast its direction six months into the future.
The Greater Philadelphia Leading Index combines four forward-looking indicators: outbound export-vessel trips, temporary employment services, the national Index of Leading Economic Indicators, and the 142-member Inquirer/ Bloomberg Philadelphia Stock Index.
The trend of the regional leading index over the last 12 months has been one of gradual growth followed by gradual decline. The 12-month moving average peaked in February and has declined each month through June, the most recent data available.
That trend indicates that the region's rate of economic growth will "decline somewhat" over the next several quarters, the organizations said in a statement. In contrast, they noted that the "U.S. economy continues to recover more quickly than the region's."
Between June 2011 and June 2012, private-sector employment in the Philadelphia and Trenton metropolitan statistical areas rose by 1 percent, which sounds good, until you peek at the United States as a whole and see that employment rose by 1.8 percent.
Hopkins said the disparity is even greater for manufacturing, where employment rose by 0.5 percent in the two local MSAs vs. 1.9 percent for the United States. He attributed the poor showing locally to the restructuring of the region's pharmaceutical and oil-refining industries.