This column started out with a look at the never-ending opposition to the proposed Data Centers project in Newark.
After reviewing this edition of the Business Bulletin and seeing the Data Center situation take an ugly turn, it was clear that issue could wait for another week. What we are seeing is an interesting time for the Delaware economy as evidenced by a number of stories in this edition and others.
Recent issues of the Bulletin have included news of businesses expanding or moving operations to the state, one example being FMC.
FMC has operated for nearly half a century at a site on the outskirts of Newark. With little fanfare, FMC announced a modest expansion to meet growing demand for one of its product lines. In Dover, Uzin Utz (no relation to the potato chip maker) broke ground on a dry mortar plant the German company expands its flooring equipment business in the United States. Before that, CD Diagnostics moved its operations from Pennsylvania to Claymont.
While the three announcements and a few others this year, add up to a several dozen jobs, the message is clear that the state’s economy is seeing a modest expansion, with manufacturing finally stabilizing That has helped cut the unemployment rate to 5.8%, a figure that is nowhere near pre-recession rates in the 4% range, but well below the 7%-plus figures we were seeing a year ago.
None of this is a reason for unbridled optimism. Home sales remain steady, but still below a rate that would jump start the economy. One exception is Sussex County, which seems likely to continue to post strong results.
AstraZeneca remains a concern, even with Pfizer perhaps walking away from its final offer for the company. AZ plans to keep 2,000 jobs in Delaware for now and a would-be acquirer would be less prone to make any promises, especially if the deal is driven by cost-cutting considerations. That seemed to be the case with Pfizer. In fending off suitors, AZ has to deliver on its promises to fill its pipeline with successful drugs, no sure thing.
We are also seeing the impact of lower income tax collections as legislators and the Markell Administration struggle with reduced revenue projections.
It could be a reflection of a two-tier economy that is creating more low-paying jobs and/or continued cost cutting efforts that are leading to no wage increases or even pay cuts for new workers. Another factor could be the exit of older workers who are typically replaced by younger people earning smaller paychecks.
Still, a modest recovery is better than none at all. While the surge we have seen in the past several months is slowing down, a slow recovery continues. In summary, it could be a lot worse.
After reviewing this edition of the Business Bulletin, it was clear that issue could wait for another week.
What we are seeing is an interesting time for the Delaware economy as evidenced by a number of stories in this edition and others.
Recent editions of the Bulletin, including this week’s issue, have included news of businesses expanding or moving operations to the state, one example being FMC.
Its site on the outskirts of Newark has operated for nearly half a century. With little fanfare, FMC announced a modest expansion to meet growing demand for one of its product.
In Dover, Uzin Utz (no relation to the potato chip maker) broke ground on a dry mortar plant the German company expands its flooring equipment business in the United States.
Before that, CD Diagnostics moved its operations from Pennsylvania to Claymont.
While the three annoucements above and a few others in previous weeks only add up to a few dozen jobs, the message is clear that the state’s economy is seeing a modest expansion, with manufacturing finally stabilizing.
That has helped cut the unemployment rate to 5.8%, a figure that is nowhere near pre-recession rates in the 4% range, but well below the 7%-plus figures we were seeing a year ago.
None of this is a reason for unbridled optimism.
Home sales remain steady, but still below a rate that would jump start the economy. One exception is Sussex County, which seems destined to continue to post strong results.
AstraZeneca remains a concern, even with Pfizer perhaps walking away from its final offer for the company.
AZ plans to keep 2,000 jobs in Delaware for now and a would-be acquirer would be less prone to make any promises, especially if the deal is driven by cost-cutting considerations. That seemed to be the case with Pfizer.
The company also has to deliver on its promises to fill its pipeline with successful drugs,
We are also seeing the impact of lower income tax collections as legislators and the Markell administration struggle with reduce revenue projections.
It could be a reflection of an economy that is creating more low-paying jobs and/or continued cost cutting efforts that are leading to no wage increases or even pay cuts for new workers. Another factor could be the exit of older workers who are usually replaced by younger people earning smaller paychecks.
Given the size of state government, even modest spending cuts forced by lower revenue projections will be felt throughout the economy.
Still, a modest recovery is better than none at all. While the surge we have seen in the past several months is slowing down, a gradual recovery is under way.
In other words, it could be a lot worse.
