The Kamran Afshar- Greater Lehigh Valley Chamber of Commerce survey of Lehigh Valley businesses is done on a quarterly basis and collects about a thousand observations per year. The Employment and Purchasing Index for the Lehigh Valley highlights the results of these surveys.

In April 2015 we conducted our 62nd survey of this series which recorded continued optimism in the local economy.

Business sentiment, as measured by the overall index rose slightly to 62.4 in April, while slightly above its January level, it was a significant 7.6% higher than its April 2014 level. It should be noted that the highest level for the index, 68.5 was reached in April 2006. The index then fell to 44.4, its lowest point in April 2009. Right now at 62.4, the index its at its highest level since April 2007.

The largest gain in the last 12 months was in the index of planned purchases for the next 6 months. This index soared by 16.6% over its last year’s level. And its trend is now at its highest level since 2007. This index is moving into the range which was historically associate with expansion for the Valley.

Another index which also recorded a significant 7.9% increase over its last year’s level is the index of actual expenditures over the last 6 months. This index, while rising, is still shy of the expansion range for the Valley.

The two expenditure indices, both actual and planned are both moving up.

The trend for the hiring index during the last 6 months moved into the expansionary range in April. Twenty-five percent of the respondents to the survey indicated that they had net addition to their employment over the last 6 months, while only 8% reported net losses in the Lehigh Valley. During prospers economic times around 25 to 30% of the participants show net gain while 8 to 10% show net loss. We are closing in.

The average business participating in the survey hired 0.8 new employees in the last 6 months. This compares to hiring around one employee in the pre-recessionary years. It should be noted that during the Great Recession, local businesses were laying off 0.8 employees. So this is not only a significant improvement compared to the depth of the recession, it is closing in on the pre-recessionary hiring levels.

More than a third of local businesses are planning to hire more people in the next 6 months, while only 2.4% of the participants planned to lay off people. Average participant in the survey is planning to hire 1.2 new employees in the next 6 months. This is the highest level for this index since the recession. Local businesses have raised their future hiring plans to above one employee since last July.

Local businesses’ actual and planned expenditures are starting to come closer to their new hiring plans. There was a while, particularly in 2014 when we initially saw hiring plans increase without the requisite increase in the plans for spending. That problem appears to have been solved.

Fifty-eight percent of the businesses participating in our April survey reported
increases in their revenues over the last 6 months, while 16% reported decline in theirs. Looking into the future, a much larger 71.5% expect their revenues to be higher while only 8.3% expect to see lower revenues.

Based on the results of our April survey we expect the Valley’s economy to show real growth over the next 6 months. Companies with more than 21 employees are expected to show significant increase in their employment levels and will lead the expansion, growing at a higher rate than others.
Overall employment is expected to continue to show higher growth rate over the next 6 months.