The question of whether Pennsylvania is heading for a recession this year has economic experts mixed on the question, with some saying that economic cycles are notoriously hard to predict.
Recent figures released by the Federal Reserve Bank of Philadelphia indicated that within the next six months, the state's economy could experience the sharpest decline since May 2009, the end of the Great Recession.
The bank's projections are based on an analysis of state data including housing permits, initial unemployment insurance claims, delivery times from the Institute for Supply Management manufacturing survey, and the interest rates between the 10-year Treasury bond and the 3-month Treasury bill.
However, not all economic experts agree that Pennsylvania's growth is headed for such a downturn.
Some experts say that data such as unemployment rates or payroll job estimates may suggest weakness in the economy, but they are not guarantees of either an impending recession or contraction.
"Forecasts are unreliable," said Andrew Abramczyk, a senior policy analyst for the Commonwealth Foundation, a Harrisburg-based public policy organization. "Nobody knows when the cycle will turn, not even the Fed's economists."
He added that "Pennsylvania has the most diverse economy in America, according to a Bloomberg study, and is likely to broadly follow the rest of the country."
Abramczyk said the more interesting question is why Pennsylvania hasn't grown as fast as other, more dynamic states in the current cycle.
"The reasons," he explains, "are an unfavorable tax and regulatory environment, resulting in prime-aged workers emigrating to other states to find work, start businesses, and raise families."
A December 2019 profile in Forbes estimated the state’s economy to be the sixth largest in the U.S. at $815 billion, with close to 50 of the 1,000 largest public and private companies in the country by sales.
But Forbes also noted that the state is expected to have among the nation’s slowest population growth through 2023, as well as low marks on fiscal health, borne out by a recent survey by Truth in Accounting showing both Philadelphia and Pittsburgh to have among the highest tax burdens in the country.
Abramczyk added that improving the state's tax and regulatory environment is what policymakers should focus on to make Pennsylvania's economy as resilient as possible.
A research note from Toronto-Dominion Bank, published last year in a Bloomberg study, said that "Pennsylvania’s proximity to large population centers and more affordable real estate remains fertile ground."
The note went on to say that “Health care has been leading job creation for the past half-decade,” while “Pittsburgh is in the process of making the transition from steel city to tech town.”