Category Archives: News

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

Business leaders cautiously optimistic about Trump at Lehigh Valley Chamber event


Despite an air of uncertainty about the new Trump administration and its impact on Lehigh Valley businesses, speakers at Tuesday’s Greater Lehigh Valley Chamber of Commerce’s annual Economic Outlook luncheon sounded mostly upbeat notes, with a few words of caution.

The two-hour event at SteelStacks’ ArtsQuest Center in south Bethlehem drew an audience of about 700

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TriCounty Chamber hears economic forecast

by: David A. Kostival, from The Reading Eagle

“Afshar spoke to the chamber as part of its annual economic forecast membership breakfast Thursday morning at the SunnyBrook ballroom in Lower Pottsgrove Township.”

“Technology is replacing jobs,” he said. ….. Many of these jobs have not gone to China; they have simply disappeared and will continue to do so as we continue to get into heavy automation,” Afshar said. “People say we don’t build anything anymore, but the truth is we produce twice as much as we did in the 1970s. We just don’t use as many people to do so.”

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Economist gives state of economy address

Mark Reccek , Reporter,
Posted: 5:52 AM EDT Jun 09, 2016


Economist Kamran Afshar, PhD, of Kamran Afshar Associates, Inc. (KAA), examined the state of the economy, both local and national, during a presentation Wednesday afternoon at the LC Bar Association in Allentown.

According to Afshar, Lehigh Valley businesses during the monthly of April saw the largest drop in the index of future purchases.

“Businesses significantly cut back on that one thing,” he said, adding the political election cycle leads to uncertainty. “Still a good number of them are expanding.”

In terms of hiring the last six months, there has been a slight drop. The number currently is about 12 percent, compared to 10 percent before the Great Recession.

“However, the number of business who have actually increased the numbers of employees is significantly higher than those that have reduced the number of employees they have,” he said.

Afshar also provided a forecast for hiring in the Lehigh Valley.

“Our current forecast for the balance of the summer is we are not going to see significant increases in employment,” he said. “By the end of the summer we are going to start to see a turnaround but we are at this point in a relatively flat area for net hiring.”

The causes, he said, are due to businesses beginning to become concerned with events that are occurring, and as businesses hire more employees they run out of the type of employees they seek to hire at the prices they are willing to pay.

Unemployment in the Lehigh Valley has decreased, Afshar also said, noting about 20,000 individuals are currently searching for employment.

“However, when you look at the initial unemployment claims, it has dropped to the level that is historically associated with a tight labor market,” he said. “If this trend continues, and I expect it to continue through the summer months at least, this would be the fourth time in the last 30 years that the Lehigh Valley has gone into a tight labor market.”

Unemployment will continue because individuals out of the employment market are not equipped to handle changes associated with certain jobs.

“At least for the next seven months you are going to see a tight labor market,” Afshar added.

Nationally, according to Afshar, the Gross Domestic Product, which crashed during the Great Recession, did rebound but then leveled off between 2 and 4 percent.

“The importance of that is we need to get the economy to about 3 and 3.5 percent,” he said. “Beyond that growth would be very slow.”

Afshar noted the economy typically “gets hot” when growth moves beyond 2.5 percent.

“Last quarter growth was really bad,” he said. “We are hovering around 2 percent growth for the year.”

The May results indicated only 38,000 new employees added to the job market

Almost 200,000 new jobs have been created every month. Since the start of the economic recovery, 80 percent of all the jobs created are full-time jobs, not part-time.

“It is a significant growth,” he said. “Employment is increasing, and that is real.”

Those unemployed for 27 or more weeks, at one point, numbered 7 million. That number has dropped to about 2 million.

Afshar also said many jobs that have left will never return “not because they have gone to China, but because they have gone away.”

“Technology has taken a lot of those [jobs],” he said. “Technology changes and the pace of that change is increasing and has become more rapid.”

Adjusted for inflation, real wages increased over the past 38 years from only $41,000 to $42,500, which amounts to 4.4 percent.

“Real wages have not increased,” he said.

The causes, he said, are due to the automation of manufacturing, which require fewer employees to do a job.

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Pessimism creeps into Lehigh Valley economy

Local employers’ spending and hiring outlook declines in Bethlehem economist’s index.

By Scott Kraus
The Morning Call