How Philadelphia may fare in recession and recovery
April 20, 2009
Mike Armstrong, PhillyInc, Philadelphia Inquirer
More and more, you can feel the change in the tone of the guessing game over whether the economy is still weakening or beginning to strengthen.
Much of the economic data continues to be bad, but what encourages some experts is that rate of deterioration has slowed. The U.S. economy is still wounded, but perhaps some healing has started.
Locally, that means it's time to ponder if the Philadelphia region will follow its typical pattern of sliding slowly into recession and climbing out slowly while other areas charge ahead into recovery.
The Economy League of Greater Philadelphia asked 32 regional business and nonprofit leaders for their thoughts on Philadelphia's response this time. Over three days in February, the league held roundtables to discuss the health of and prospects for the region's economy.
The group was united in its belief that the concentration of health-care and educational institutions had softened the blow once again. But even those two sectors have begun to freeze hiring and cut employees.
The job market is a lagging economic indicator. So employment continues to shrink even as economic recoveries take hold.Gerald L. Perrins Jr., regional economist for the Bureau of Labor Statistics, said the unemployment rate in the city during recessions historically lags behind any recovery by two years. So Philadelphia undoubtedly will be playing catch-up again.
Architects, engineers and commercial developers see little to cheer them. Attendance at conventions is down. Small businesses are feeling the credit squeeze.
Several of the participants did see optimistic signs. Paul Levy, CEO of the Center City District, said that office occupancy rates in Center City were the highest ever in 2008. Tom Morr, CEO of Select Greater Philadelphia, a group that seeks to attract and retain companies, said inquiries from firms seeking information about relocating here have not fallen off.
And, the seeds of the recession were sown in an overheated housing market and financial services' boom. Neither really were factors in regionally. In this case, missing out meant we haven't seen "contraction as severe," the report says.
But there remains a feeling of uncertainty, that this recession is very different from the last two.
The group considered the chance that the arrival of the worst in our region simply has been delayed. "We might experience the downturn most acutely later than others, and as a result we might also emerge from it later," says the league's report.
Allison Kelsey, director of communications for the Economy League, says they hope to get the group together again in six months to revisit these issues.
But why wait for the experts? You can weigh in on regional economic outlook by filling out a survey about the biggest issues facing the U.S. and the Philadelphia region.
For the defense
One company that's not based in the region, but employs more than 11,000 people here, will bring its annual meeting to Philadelphia this week.
Lockheed Martin Corp. will hold its meeting at the Doubletree Hotel Philadelphia, 237 S. Broad St., on Thursday at 10:30 a.m. (If you can't attend in person, you can listen to a live webcast here.)
Besides the usual votes on directors and independent auditor, there are three shareholder-sponsored proposals.
One asks the board of directors to provide a full report on Lockheed Martin's involvement in space-based weapons. The resolution is sponsored by a group of religious organizations, including Philadelphia's Saint Joseph Convent, the Sisters of St. Francis of Philadelphia, and Catholic Health East, the Newtown Square-based hospital system.
Another proposal, sponsored by the City of Philadelphia Public Employees Retirement System, requiring shareholder approval of "golden coffin" compensation agreements. Just like it sounds, such policies obligate a company to make payments of salary, bonuses and other benefits following the death of a senior executive.
The third effort, put forward by a Redondo, Calif. man, seeks to give shareholders the right to vote on executive pay. It's one of many "say on pay" measures being considered at annual meetings this spring.
Need I mention that the Lockheed Martin board opposes all three resolutions?
Trading Places
The World Trade Center of Greater Philadelphia has hired Linda M. Conlin as its president.
She'll join the nonprofit economic development group June 1. Conlin is currently vice chair and first vice president of the Export-Import Bank of the United States in Washington.
Before that, she'd been executive director of New Jersey's Commerce and Economic Growth Commission during the Whitman administration.
Conlin succeeds Joanna Savvides, who founded the local World Trade Center group in 2002. Savvides announced her retirement in November.
Earnings
Tuesday: Ametek, DuPont, Harleysville Group, Fulton Financial, Lockheed Martin, Merck & Co.;
Wednesday: Air Products, Boeing, Destination Maternity, GlaxoSmithKline, Kensey Nash, Vist Financial;
Thursday: AmerisourceBergen, Delphi Financial, Encorium Group, Exelon, FMC, Hershey, J&J Snack Foods, NutriSystem, Omega Flex, Penn National Gaming, PNC Financial Services, SEI Investments, SuperValu, US Airways, Univest;
Friday: Quigley, Republic First Bancorp, Wilmington Trust, WSFS Financial.
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