Wells Fargo forecast: Pa. economy ready to grow in 2015

A Wells Fargo and Co. economic outlook predicts the state's financial situation should gain ground in 2015.

The economic report predicts that output, employment and income growth all will strengthen in 2015, with construction activity — both commercial and residential — also gaining strength.

The report specifically points to the trio of major retail distribution centers being built in Lancaster County — Forever 21, Nordstrom and Urban Outfitters — that are helping eastern Pennsylvania become a “magnet for e-commerce fulfillment centers.”

The report also says the transportation and distribution industries are helping drive growth in Harrisburg and in areas south along Interstate 81. It also points to the state’s apple industry — a specialty of the midstate — as an agribusiness industry that saw increased investment in 2014 and should continue to grow in 2015. That includes the expansion of the Bell and Evans chicken processing plant in Bethel Township, Lebanon County.

The redevelopment efforts taking place in Harrisburg and Lancaster are reasons to think the state is poised for 2015 growth, according to the report.

"These efforts, which include improving streetscapes, enhancing lighting and redeveloping industrial sites and public spaces, are critical in Pennsylvania, where the infrastructure is often dated and the tax base is limited," according to the report.

However, the report says Pennsylvania’s recovery “has been a slow one,” as an older population, slow population gains and migration trends “create a strong undertow to economic growth.” The report lists the closing of the Perdue chicken processing plant in Bethel Township, Lebanon County, as a detriment to the state’s overall economic growth. The closing put about 600 people out of work.

While the natural gas boom of the Marcellus Shale is seen as a large growth industry for the state, plummeting natural gas prices have forced some companies working in Pennsylvania to cut capital expenditures budgets for 2015. Range Resources cut its capital budget 18 percent, according to the report. However, the investments in downstream projects — like pipelines, refineries and processing centers — show promise.

“We expect Pennsylvania’s economy to post slightly stronger job growth in 2015 than it did this past year,” according to the report. “Some of the areas that have not contributed that much to growth in recent years should come back on line in a more significant way this year, namely construction and financial services.”

Source: Central Penn Business Journal