2022-23 PA budget depicts state’s economic recovery for coming years

2022-23 PA budget depicts state’s economic recovery for coming years

2022-07-18T15:07:23-04:00July 18th, 2022|Economy, Midterms 2022, Pittsburgh, Tourism|

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Writer: Joey Garrand

2 min read July 2022 — Pennsylvania’s recently signed 2022-23 state budget depicts the state’s slow but steady economic recovery for the coming years.

“Real gross state product will grow by an annual average of 3.3% per year from 2020 to 2025, a bit below the national rate of 3.6%. Personal income will rise 3.6%, compared with 4.2% for the country,” stated Gov. Tom Wolf’s 2022-23 Executive opens in a new windowBudget in Brief.opens PDF file

On Feb. 8, Gov. Wolf passed a $45.2 billion opens in a new window state budget for fiscal year 2022-23. Key highlights of the budget include a historic $1.8 billion investment increase in education, a $3.6 billion surplus and additional investments for safer communities and success for Pennsylvanians.

While Pennsylvania is often acknowledged as a stable economy that tends to follow the national economy but with less volatility, the budget depicts the state’s difficult recovery from the pandemic. For 2019, the state’s population was 12.993 million. The state’s population is slowly recovering from the events of the past few years, but by 2024 it is expected to be 12.991 million, still short of 2019 levels.

Total employment is anticipated to make a full recovery by 2024, but employment in the manufacturing sector is expected to continue lagging pre-pandemic, 2019 levels. Manufacturing employment totaled 574,700 in 2019 and is predicted to be 552,600 in 2024, while total employment is expected to grow from 6.066 million in 2019 to 6.099 million in 2024. Despite the decrease in manufacturing employment, the state’s share of manufacturing employment remains above the national average.

Long term, beyond 2024, the state’s manufacturing competitiveness “should be enhanced by the decreased costs of energy and petrochemical feedstocks coming from beneath the state.” The Marcellus shale natural gas deposit serves as a valuable long-term asset for the state despite recently slowed drilling activity due to low prices for natural gas. The development of natural gas continues to be one of the biggest factors in Pennsylvania’s economic outlook.

The budget also highlighted the importance of education to the state’s economy. Among the Commonwealth’s Top 30 non-governmental employers are Pennsylvania State University at No. 4, University of Pittsburgh at No. 9 and Temple University at No. 28. These institutions are poised to gain significantly from the new budget’s $125 million increase in funding for higher education, with each of these institutions to receive millions of dollars in additional funding.

Looking to the future, “Professional, scientific, and technical services will continue to be a bright spot for the state in terms of job growth and economic output gains.” High-tech sectors such as artificial intelligence, industrial automation and bio-sciences are anticipated to show the most growth, while traditional fields such as in professional services should see moderate gains. The state’s healthcare and social service sector will also continue to see steady growth but at a slower rate compared to previous years.

Overall, it will be the large metropolitan areas that lead the state’s recovery, such as Pittsburgh and Philadelphia, while “smaller towns and rural areas feel the effects of low (or negative) population growth and fewer available services.”