Tight labor market, a housing shortage, lack of industrial space and redundant government services present the greatest challenges to the local economy in the coming year, about 400 Lancaster Chamber members were told Friday.
Presenting that message at the Chamber’s annual economic forecast was the CEO of Fulton Bank affiliate Fulton Financial Advisors, Dave Hanson.
Here are four takeaways about the county economy from his presentation:
Labor concerns
Lancaster County has the second tightest labor market in the state and the 41st tightest in the United States There’s been an employment decline in manufacturing and retail trade. In the last decade, manufacturing’s share of the county workforce has declined 1.3% and its productivity declined 3.7%. The gap between people entering the workforce and the people leaving the workforce in manufacturing is the greatest. More than a quarter of the county’s manufacturing workers are over the age of 55.
“I think we got a little issue in our county around manufacturing around labor and the trends there.” Hanson said. “We live in a country where there is a lot of on-shoring going on. Well, in our county we probably can’t participate in that much because we don’t have the labor to do it and frankly we don’t have the expansion capacity to build any plants.”
Housing impacts workforce
A decade ago, Lancaster County had one of the tightest residential vacancy rates in the country and now the county has the tightest, declining from 4.7% to 3.5%.
“The question we ought to be asking ourselves as a county is how do we grow a workforce without housing. It’s a national issue, but it’s a very severe local issue.”
Little room for on-shoring
The vacancy rate of industrial space is less than 3%. There are less than 18,000 acres of developable property in the county and only 1,500 acres of industrial land available. At the rate of current development the county would run out of developable property in about 18 years. Industrial and manufacturing has historically been the driver of county growth.
“So if we are that constrained in labor and housing and space in a world that is on-shoring manufacturing that should probably be causing some of us concern,” Hanson said. Lack of water and sewer infrastructure is a hurdle to approval of multi-family projects, he said.
Local government: ‘too much of a good thing’
Hanson posed his theory that municipal congestion is holding back growth. He said the county has 60 municipalities, 16 school districts and about 40 water and sewer infrastructure owners and 500 zoning districts. He said the county has more fire equipment than the entire state of Delaware.
“Local government is a wonderful thing,” Hanson said. “But I think we can all agree that too much of a good thing can become a bad thing.”
Hanson said having so many entities impacts the availability of developable land, the quality and cost of infrastructure and public safety. With the number of separate municipalities, he said, it’s difficult to find a cohesive solution to problems like homelessness.
Hanson urged the crowd of business leaders not to accept so-called municipal congestion as a fact of living in a commonwealth.
“Be aware of it; call it out when you see it,” he said.
He urged supporting intermunicipal operating agreements, zoning simplification, revenue sharing with neighboring municipalities and more state-level standardization. He lauded the county’s Places 2040 plan that is addressing some of the important issues.