Uptick in Coincident Index May Reveal More Robust Economic Growth in the Region Depending on Activity over Next Several Months

The Greater Philadelphia economy is continuing a steady but moderate recovery according to Select Greater Philadelphia’s and IHS Global Insight’s Leading Index (GPLI) for the Greater Philadelphia region. However, an uptick in the Greater Philadelphia Coincident Index (GPCI) could potentially mean a more robust recovery ahead depending on several more months of readings.

The most recent monthly values for the GPLI through January 2011 continue to show, similarly to the fall 2010 release, that the GPR’s economy continues a moderate recovery that began during first quarter of 2010. The GPLI started rising again in August after showing little change during the summer months. The steady, upward trend in the 12-month moving average continues to show that the region’s economy will continue to expand, while the upward trend of the last three months suggests the possibility of a higher growth rate by the end of the year. The GPLI can be viewed online at http://www.selectgreaterphiladelphia.com/data/eco_indicators_li.cfm.

The January 2011 value of the GPLI was 98.7, up from 98.5 in May, and well above the 98 that lasted from May through August when concern about the possibility of the U.S. economy sliding back into recession was higher.  Compared to the fall release, the GPLI presents a slightly more optimistic outlook for the performance of the GPR’s economy six to nine months from now; although the region’s recent minimal employment growth is of concern.

“The recession has now been over for a year and a half, and while the overall trend is still gradually upward, some uncertainty is still present about the strength of the regional recovery,” said Phil Hopkins, vice president and director and research for Select Greater Philadelphia. “Several more months of readings of the GPCI will be needed to confirm if the uptick in January was for real.”

The GPR’s economy was gradually improving throughout the summer months and into October.  However, US economic conditions declined in November and December, in part because of uncertainty over the mid-term elections and the potential changes in economic policy, so that the region’s economic recovery stalled, before bouncing back strongly to a level of 92.4 in January 2011.  The overall trend is still gradually upward, but some uncertainty still exists about the strength of the regional recovery.  Several more months of readings of the GPCI will be needed to confirm if the uptick in January was for real. The GPCI can be viewed online at http://www.selectgreaterphiladelphia.com/data/eco_indicators_cli.cfm.

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