For better or worse, the business, workers, and economy of the Philadelphia metropolitan area in 2023 will look very different from the previous year.
At the Greater Philadelphia Chamber of Commerce’s Economic Outlook event on Friday, business leaders in the region predicted what could happen in the year ahead. They agreed that a recession could be possible and inflation could slow. It’s a challenge.
What does that mean for the Philadelphia area? Here are three takeaways from their discussion.
Hiring remains a challenge across industries, and burnout doesn’t help.
Philadelphia Federal Reserve Bank Governor Patrick Harker said the job market was already tight even before the COVID-19 outbreak, but it is only getting worse.
The pandemic has forced some people to retire early and has shrunk the workforce due to illness and death, he said. he pointed out.
Many businesses in the region are overwhelmed with recruiting that they can’t handle in-house, said Marcia Zaruba-O’Connor, president and CEO of the O’Connor Group, a human resources and recruitment firm.
“A lot of burnout happens because people work two or three jobs because they can’t find a job for themselves,” she said, noting that continuous overwork drives people to quit their jobs. is pushing into
Employers should think about ways to retain employees, says O’Connor. And companies should be prepared to invest in mental health, she said, estimating that the cost of mental health for businesses could double to quadruple in the next few years. doing.
But there is one area ripe for adoption, she said. It’s about bringing back colleagues who have recently retired.
“The boomerang will come back,” said O’Connor. “Some people who left during COVID for better jobs found the lawn not green.”
Technology and life sciences are gaining importance.
Philadelphia’s long-standing bread and butter—education and health services (aka ED and MED)—still serves as an important anchor for the local economy, but its reliance on it is declining, Harker says.
That’s good, he said.
He pointed to the importance of emerging industries, including life sciences, which employs over 70,000 workers in the Philadelphia area.
O’Connor said life sciences companies are trying to hire enough people, so they’re getting more creative in training new employees and assessing whether a college degree is required for a particular job. I’m here.
Another area where employers are craving talent is in technology. It’s not just the flagship tech giants and fast-growing start-ups.
For example, Wawa creates its own customer-facing technology in-house, which requires skilled people to do it. CEO Christopher Gheysens noted the gap between the number of mid-level technical talent needed by businesses in the region and the talent available nearby. With this shortage, Wawa made plans to open his tech training hub at his former store on 19th and Market Streets.
A recession is possible, but it can be mitigated.
Lara Lam, chief economist at FS Investments, said in her keynote address before a panel discussion that the odd combination of a strong job market and weak economic growth is creating uncertainty and “distress” for many. Stated. Signs point to a possible recession, and “without a recession, it’s unlikely to be a really strong year of growth,” she said.
But Rham added that recessions come in many forms. Her last two recessions were severe, but before that, in 1990 and 2001, she said, the recessions were “shallow and rather short-lived.”
Philadelphia Fed’s Harker said it was important for policymakers to strike a balance between keeping inflation under control while preventing a large rise in unemployment. “I’m optimistic that we can do some kind of soft landing,” he added.
With that in mind, local business leaders plan for sometimes massive growth.
Philadelphia Eagles president Don Smolenski pointed to an unexpected harvest from the big sporting events already on the calendar for years to come.The 2026 FIFA World Cup is expected to draw 450,000 visitors. , with an estimated economic impact of $450 million. And he said the city will host his WWE’s WrestleMania in 2024, giving Dallas his $200 million financial impact last year.
Wawa remains on track to double its store count in 2020 to approximately 1,800 by 2030. Gheysens acknowledges that some of that will be done outside the region, but much of it will be within the chain’s core markets, including southeastern Pennsylvania.
“Any good business will make sure they stay tight and focused during a recession, as we do,” Gheysens said.