In Philadelphia and Pittsburgh – bookending Pennsylvania – people are grateful for the “eds and meds,’’ as the concentration of universities, hospitals, and pharmaceutical firms is lovingly called. They credit the combination for cushioning the region in the depth of the recession and now helping to generate slow but steady growth.
“Eds and meds” are also credited for helping the state’s northwest region, as is growing port activity around Erie and the expectation that eventually some of the shale gas boom playing out in many of the counties in the state’s central northern area will benefit the entire northern edge.
Indeed, even areas not directly touched by the gas play are hoping a rising tide will lift all boats, and that cheap energy will spark resurgence in industries that need gas and petroleum products, like plastic manufacturers.
Talking to bankers, politicians, and policy wonks around the state, there’s a feeling of cautious optimism. For the most part the expectation is for measured growth. Since Pennsylvania didn’t feel the same level of pain as states that experienced wild real estate bubbles, many are quick to say our recovery will likewise be slow.
That’s not to say there are no concerns.
Micro issues include finding a way for the state to educate unemployed workers to qualify for jobs. Some say swift passage of the pending transportation bill would address the state’s aging infrastructure and provide a needed boost. Some worry that overregulation could strangle the budding natural gas industry. Others point to the state’s failure to curb public pensions as a huge local tax hike waiting to happen.
As for macro issues, worries include sudden jumps in interest rates, another budget deadlock at the federal level, and a black swan concern that Europe could slide into recession taking us with it.
The following is a look at the “four corners’’ of Pennsylvania and what community bankers and area leaders think is in store for the commonwealth and their region in 2014.
Read the full article in December’s issue of Transactions. Aren’t a subscriber? Visit the Transactions page on this website or call PACB at 717-231-7447 to start receiving the magazine.