Trying to figure out where the nation’s economy is headed frequently seems like an exercise in reading tea leaves — the methods imprecise, the results often bitter and soggy.
Worse-than-expected unemployment numbers, coupled with weaker manufacturing figures, clouded the national economic outlook yet again last week, while numbers for Pennsylvania and the midstate continue strong in comparison. For a business wanting to plan long term, it’s difficult to know what to think.
But in one area regionally, better numbers may point the way to a national, positive trend. As the Business Journal reports in this issue’s Inside Business section on distribution and shipping, two industries show signs of vigor after a notable slow period.
First, speculative warehouse construction is back on the drawing boards. While still just a trickle, the projects are the first in Central Pennsylvania since 2008 and represent a welcome sign of optimism amid the generalized uncertainty regarding a recovery. Accompanying the new building is an increase in sales and acquisitions in the midstate warehouse real estate market over the past year.
Hand in glove with the warehouse activity is rail freight — which also is up. Both Norfolk Southern, which has a significant midstate presence, and its competitor, CSX, are experiencing higher revenue. In particular, intermodal volumes — or containerized shipping — are up in Central Pennsylvania.
Obviously, this is good for local employment.
Multimillion-dollar infrastructure investments here, namely in intermodal facilities, should continue to drive rail freight volumes. Norfolk Southern’s Franklin County intermodal terminal in Greencastle, for example, represents a $97 million investment for the area economy. Expected to open by the end of the year, it also is an example of how public/private partnerships can work to create stable economic growth locally; the commonwealth put about $45 million into the project.
More workers will be needed to move all those goods around on the ground and, in most cases, get them back on the road to their final destination. That’s why this regional activity sounds a hopeful note for America.
The majority of those goods are on their way to other markets. Central Pennsylvania is a distribution hub for tens of millions of people and hundreds of thousands of businesses. Their purchasing power is the driver behind this local revival. If developers didn’t have confidence in a reviving willingness and ability to buy, none of this activity would be occurring.
Amid these positive signs, local businesses should derive some confidence to actively plan for growth as well, if not actually beginning to hire and expand at a more accelerated pace.