Category Archives: News

Lehigh Valley’s inflation was 3.6% in 2019

Lehigh Valley’s inflation rate in 2019 was 3.6%, according to the Kamran Afshar Data Analytics Center (KADAC) @ DeSales University Consumer Price Index.   

Lehigh Valley’s inflation rate rose by 3.6% in 2019, higher than the 2.3% at the national average. The higher inflation in the Valley is mostly due to the sharper rise in food and shelter costs compared to the national average.

Food prices increased by 5.5% in the Valley, compared to 1.8% nationwide in 2019. In both the Valley as well as the national average, the increase in the overall food prices was mostly due to the sharper rises in the sub-category of meats, poultry, fish, and eggs. In the Lehigh Valley.

The cost of Shelter in Lehigh Valley also rose at a higher rate of 5.3% compared to 3.2% at the national average. This was mostly influenced by a 5.8% increase in rent and rental costs in the Valley compared to 3.3% at the national average.

On the lower side, Apparel costs dropped by 6.5% in the Valley compared to a drop of 1.2% at the national level.  Lehigh Valley transportation costs rose at a slower 0.8% rate compared to 2.0% at the national level.

This is the first in a series of continuing reports on the Lehigh Valley CPI, from KADAC @ DeSales University.  Future updates will be provided on a semi-annual basis.

Lehigh Valley business sentiment index crashed to historically low levels

In April, the Lehigh Valley Business Sentiment Index, the BSI, dropped 32% below its January 2020 level.

The LV BSI is based on the Greater Lehigh Valley Chamber of Commerce-Kamran Afshar survey of the Valley businesses done on a quarterly base since 1998.

The Valley’s business sentiment, which had already given up a year’s worth of growth during 2019, gave up 10 years of gradual climb in April 2020, falling to 43.9, almost a point below its lowest level during the Great Recession.

Our employment indices were dropping since the middle of last year. In April, the index of actual hiring in the previous 6 months, followed its 5% drop in January with an alarming 24% drop. While the Valley’s unemployment rate vaulted out of a tight labor market lows into a high unemployment environment, it was already on the way up well before April. It bottomed out last June at 4.2% and then started to rise and was already close to 5% before jumping to 6%, and we predict it will exceed 15% in April on its way up. It is not just that the tight labor market is over; the unemployment rate is expected to rise to historically high levels.

The percent of local companies which reported layoffs, was 5% during 2018 & 2019, while the percentage of those which were hiring hovered close to 30%. In January 2020, we observed a significant change; percent of businesses that were laying off almost doubled, while the percentage of those which were hiring dropped. And in April, the percent of companies laying off tripled, while the percent of those hiring was almost halved.
Our purchasing indices, both actual and planned, had large losses, dropping by more than 40%. Unlike the hiring indices, the purchasing indices were not dropping before April 2020, and now they are falling twice as fast as the hiring indices. The revenue indices dropped by 50%. And to add insult to injury, it is the index of expected revenues over the next 6 months, which has dropped significantly worse than actual revenues over the last 6 months.

The future thankfully is not as dark, and while there are more than the usual number of companies that are planning further layoffs, there are also almost twice as many who are planning to hire.

The Lehigh Valley’s data indicate that we are in a very sharp recession, the economic cycle is expected to be U-shaped, with recovery starting in the 4th quarter and hopefully getting legs in the 1st quarter of 2021.

2.4% growth for the Valley in 2018

Lehigh Valley’s economy grew by 2.4% in 2018, after a decline of 0.4% in 2017 according to the BEA

KADAC Forecasts Slowdown in Lehigh Valley Economy

by Janelle Hill Nov 7, 2019


Dr. Kamran Afshar, director of the Kamran Afshar Data Analytics Center at DeSales University, released the results of the latest Lehigh Valley Business Sentiment Index (BSI) along with students Megan Mess, Matthew O’Neill, Emma Stanfield, and Tyler Sarge.

According to the survey, the valley is still in the midst of a tight labor market and businesses are not laying off. But the hiring pattern that peaked last October has been declining, and momentum for hiring is also crashing. 

“We are still in the area that represents growth but we are no longer in the strong growth region that we were before,” Afshar said, while noting that this is the first time since the Great Recession that the valley is facing a significant drop in plans for future hiring. 

Purchasing patterns also remain in the growth region but that index is declining as well, reflecting a sentiment of extreme caution. Afshar is predicting a significant slowdown in the local economy over the next six to nine months, but he cautions against using the r-word just yet. 

“I always emphasize that these are forecasts; none of them are prophecies. There is no question we are on top of the hill. The question is are we starting to go down, and, if we are, is it going to be a soft landing?”

 Dr. Kamran Afshar, director of the Kamran Afshar Data Analytics Center at DeSales University 

The BSI is based on quarterly data collected since 1998 and reflects Lehigh Valley businesses’ survey responses around key economic and political events. 

Survey shows signs of continuing economic slowdown

By: Brian Pedersen
November 6, 2019

How are Lehigh Valley businesses doing?

Today on #LVDiscourse, @KAAresearch discusses the results of the latest review of LV businesses with guests Becky Bradly (@LVPlanning) and Joshua Dodd (Univest Bank & Trust).

6 – 7 pm | 88.1 FM +


Lehigh Valley business sentiment Dropped for the third quarter in a row

The Greater LV Chamber of Commerce-Kamran Afshar survey of local businesses recorded its third drop in row in the local business sentiment Index in July.
For a little back ground, this is a quarterly survey of the Valley’s businesses that has been conducted since 1998.
The overall index has dropped in each of the last 3 quarters. The last time it rose was October 2018. The index of business sentiment and the overall confidence in the local economy in July dropped 6.4% below its January level. This now places the index 9.0% below its October 2018’s level.
Of the last three drops in the index, the April’s 5.9% drop was the largest. The July survey showed a slight drop with only two of the 4 main indicators in the red. One of the indicators that dropped was the index of actual hiring over the last 6 months which went down by 4.0% during the quarter. This, on top of two other large drops in the previous quarters, places the index of actual hiring 12.2% below where is was in October 2018, a significant decline. It should be noted that while the index of actual hiring, suffered a 12.2% drop in 9 months, it is still running strong. The index is just no longer in the “strong growth” range.
Another index with a large decline since October 2018 is the index of plans for future hiring. Despite recording a slight gain in July, it is still 11% below its October 2018 level.

The index for actual purchasing over last 6 months rose slightly in July, now putting it only 5.0% below last October’s level. Despite the drop from last year, the index is still trending in the expansionary range. This is the range that is historically associated with higher rates of economic growth.
It is interesting to note that purchasing plans for the future have been consistently dropping and are now 8.2% below last October level. This index is now trending below the expansion range for the Valley.
Businesses participating in the survey are experiencing a gradual drop in the rate of growth of their revenues. This index has been trending down since July 2017.

One of the leading indicators about the health of the economy is the Purchasing Manager’s Index (PMI). This index has been trending down since August 2018. In the year leading up to September 2019, the PMI dropped in nine out of the 12 months, including every single month since April 2019.
Now, with a full fledged trade war in the background, the economy appears to be moving toward a slowdown over the course of this year and next. The flattening and now inverted Term Structure of Interest Rates is usually a negative indicator for the future of the economy. While this may not be a forecast of a recession, it is a forecast of a slowing in the rate of growth in the US economy.

Lehigh Valley business sentiment highest since 2007

The Greater Lehigh Valley Chamber of Commerce -Kamran Afshar survey of the Valley businesses is a quarterly survey that has been conducted since 1998. In April 2018. The business sentiment index in the Valley rose to its highest level since 2007!

The index of hiring plans for the next 6 months with an increase of 6.9% over its January 2018 level recorded the largest increase among indicators in the model. Employment in the last 6 months also recorded a significant increase in the April survey. The purchasing indices, however, both showed small increases in 2018, while remaining below their April 2017 levels.

The index of hiring plans for the next 6 months spiked to 69.9 in April, its highest level since July of 1999! This index is now at the top of the range which is historically associated with rapid employment growth in the Valley.

The index of actual hiring over the last 6 months also recorded a significant increase in April 2018, exceeding its April 2017 level by 7.1%. This index is also in range associated with rapid employment growth in the Valley.

Valley businesses participating in the survey have reduced their layoff rates to below their boom years level during 2004 through 2006. A data point which is directly supported by the decline in the number of initial unemployment claims which has now dropped to tight labor market level for the Valley.

The index for actual purchases over the last 6 months while increasing during the last two quarters, is still below its last year’s level and is trending flat. The rapid increase in purchasing during the first 2 quarters of last year appears to have been mostly due to post election enthusiasm. Many of the same businesses have cut back their rate of expansion.

One of the surprising results of our surveys is the observation that the percent of local businesses which had reported increases in their revenues dropped well below its January 2018 level and is at a statistical tie with its April 2017.  Also, of concern is the drop of the index of expected future revenues to below its April 2017 level.

The lower corporate and personal income taxes have moved from the roam of expectation to reality. The trillion-dollar infrastructure bill or anything resembling that is still an expectation. And while we will see increases in consumer and corporate expenditures, at least, through the middle of summer, its sustainability beyond that is being debated. It is however, very clear that the current tax breaks, will cause higher deficits, at the very least, early on. Since the labor market is at full employment level, and deficit is rising rapidly, inflation and higher interest rates are not far behind.

DeSales, Kamran Afshar Partner on New Data Analytics Center

DeSales University is joining forces with Dr. Kamran Afshar, a leading economist, on a groundbreaking new data analytics center that will put students at the forefront of research and consulting.

The Kamran Afshar Data Analytics Center at DeSales University  (KADAC) will open in January 2018 in the Gambet Center for Business and Healthcare.

“It is an educational entity,” says Afshar, president of Kamran Afshar Associates, Inc. “It is there to get the students involved in data analytics as it impacts real-life events. We will have heavy student involvement in the process.”

The center will provide paid internships for undergraduate students to conduct research and consulting projects under the guidance of Afshar and select faculty members.

Prospective clients will include banks, retailers, and housing and real estate developers, as well as local and state governments. Students will work real-world client projects — everything from customer satisfaction surveys and business purchasing intentions to economic impact analyses. But the list doesn’t end there.

Afshar also plans to partner with different academic departments and divisions across the University, including healthcare, education, and criminal justice for starters.

“The synergy of working cross disciplines will manifest itself in a variety of different ways,” he says. “This partnership will benefit all stakeholders – business clients, students, the extended Lehigh Valley community, local government bodies, and others. The data analytics field is not limited to one functional discipline; we are only limited by our imagination.”

To read more click here

Small businesses cautiously optimistic


WHITEHALL, Pa. – Small business confidence has reached its highest point since December 2004, according to a new survey from the National Federation of Independent Business. The NFIB, a conservative leaning organization, does a new survey of members each month. “Small business owners like what they see so far from Washington,” the NFIB President & CEO Juanita Duggan says in an article on the organization’s website. “They can see relief on the horizon, and they are much more optimistic about the future.”

To get a perspective more focused on our area, WFMZ contacted Dr. Kamran Afshar, the Chief Economist for the Greater Lehigh Valley Chamber of Commerce.

to read more click here