[Not a valid template]While long-term prospects are brighter, a report from PNC indicates the recovery will continue to be slow, with the jobless rate hanging around 7 percent through 2014.
The first quarter report that covers the Wilmington and Dover metro areas says job growth has been lagging behind the rest of the nation. It also reflects conditions reported by business owners and salespeople who report stronger growth in their operations elsewhere in the region. The report used federal statistics and PNC forecasts.
The report saw weakness in the finance and professional/business services sector. Of late, employment has been growing in the financial services sector, with smaller gains in construction as signs point of a recovery in housing. Government employment has remained steady.
The report noted that the Delaware jobless rate has decreased below the national figure mainly because the total labor force has grown little during that period. That is also reflected in a slowdown in population growth as workers find jobs elsewhere.
One difference from past recoveries, according to the report is the lack of an auto industry in the state after both plants closed in 2008 and 2009.
In previous recoveries, an upturn in auto sales would have helped the state. The auto industry has been one of the key players in the current recovery.
The weakness is also reflected in sluggish income growth, due to the loss or lack of growth in higher-paying jobs.
Factors that could hold back growth in the near term include the “sequester” spending cuts that could affect employment at Dover Air Force Base and possible new regulations that could affect growth in financial services.
The PNC report indicates that growth in areas such as finance will give the state higher incomes in coming years.
Over the long term, Delaware’s traditional strengths will serve it well, the report indicated.
“Although population growth and in-migration will not return to that experienced during the boom years, they will pick up thanks to the area’s low taxes, affordable housing and advantageous location,” the report indicated. Over the long run, Delaware’s skilled workforce, pro-business environment and concentration in well-paying finance jobs will lead to employment growth above the national average, and well above average for the Northeast. Upside potential to the long-run forecast comes from construction of improved rail links with Philadelphia, which could lead to more commuters moving to Delaware to take advantage of the state’s less expensive housing and low taxes”
