By standard economic measures 2013 was a good year for Delaware. The rate of increase in jobs by Delaware businesses (1.7%) equaled the job growth throughout the nation. The state’s unemployment rate fell from 7.1% to 6.2%. And total personal income grew 5.4% in the First State compared to 3.6% across the U.S.
In absolute terms the gains in jobs came from professional and business services (3,300), financial services (2,000), leisure and hospitality (1,900) and healthcare (1,500). Modest losses continued in construction, manufacturing and retail trade.
Delaware professional and business services are anchored by a steadily advancing legal services industry and gains in computer programming and systems design. Also growing have been management and technical services, including human resource out- sourcing, and security services. These gains have offset sustained losses in temporary help, telemarketing and telephone call centers.
Within financial services the commercial banks continue to shrink their work forces as they shift increasingly to electronic platforms while the gains in jobs at the credit card banks are in part due to the internalization of what were formerly temporary help positions.
The gains in leisure and hospitality are concentrated in the restaurant industry where pay is one-third the state average wage and benefits are scarce. Plus the market share of restaurant sales at fast food places is growing one-third faster than at full service restaurants.
As noted previously by DECON First, the net annual gains in Delaware’s healthcare industry have been declining since 2010 and DECON First expects the healthcare job gain to fall to below 1,000 during 2014.
The bottom line is that in 2014 the total number of jobs created by Delaware businesses will continue to rise, but at a slower rate than during 2013. The new positions available for workers with less education will stay scarce and offer low wages, while a majority of the more skilled positions will continue to go to out of state residents who commute into New Castle County to work.
The out-flow of wages is reflected in the personal income data for Delaware as the rate of out-flow rose 6.8% compared to a the 5.4% increase in personal income, and earnings by place of work jumped 6.3% compared to just a 4.8% rise in earnings by place of residence. Over 2013 approximately 7,000 Delaware residents have exited the labor force and employment among residents is down 3,000.
Not surprisingly, the transfer payment component of Delaware personal income is up almost 6% on a year over year basis. Since the recession the number of Delawareans receiving food stamps (SNAP) is up 68% (compared to 42% in the U.S.) and the total persons receiving cash assistance is up 57%. As of 2012 the individual poverty rate in Delaware stood at 12% and the poverty rate for female headed families with a child under 5 years of age exceeded 41%.
DECON First Expects these trends to continue through 2014: jobs being added by Delaware businesses, slow growth in residential employment and personal income and further evolution of a two-tiered consumer base.
INDICATORS:
Of the more than 60 indicators followed by DECON First the most notable changes have occurred in the following:
– Delaware’s labor force continues to shrink
– Interest rates hold steady at levels well above a year ago
– The proportion of non-accrual home equity loans held by banks in Delaware is on the rise The housing recovery continues to be hesitant
DECON First uses economics to strengthen Delaware business. This is accomplished by providing accurate, objective, and relevant analysis of the economy, coupled with best practice recommendations that deliver new customers. The detailed analysis for the Indicators above is found in the DECON First monthly Delaware Economic Review (www.deconfirst.com). Direct questions to info@deconfirst.com
