Lancaster: Economy

Major Industries and Commercial Activity

Lancaster County has a widely diversified economy; industries range from manufacturing to agriculture, tourism to health care, and retail trade to wholesale distribution. Many firms in the county have existed there for at least 50 and some for more than 100 years, including the oldest tobacco store in the country.

Lancaster County is known for the incredible diversity of its agriculture. The county's 4,500 farms make it one of the top farming counties in the United States. Together, these farms raise 45 million broiler chickens, 10 million laying hens, 95,000 dairy cows, 250,000 beef cattle, and 335,000 hogs annually. The county also leads all Pennsylvania counties in the value of its livestock, dairy products, wheat, corn, hay, tobacco, eggs, and milk, earning $725 million a year in agricultural revenue. Farmland preservation is a top priority for Lancaster County planners, who are struggling to preserve farmland even as the population grows and development continues. In 1999, Lancaster County had more than 30,000 acres of preserved farmland and 375 preserved farms, more preserved farms than any other county in the nation. The state of Pennsylvania has allocated millions of dollars to the farm preservation effort, which offers farmers economic incentives when they sign over development rights to the state so that the farmland can never be sold for development.

Lancaster County's industrial base is supported by hundreds of manufacturers and distributors. Service industries account for millions of dollars in revenue. More than 11,000 businesses employ more than 250,000 local residents.

Millions of tourists visit Lancaster County every year to tour its historical communities, view its rich architectural heritage, and witness life in its picturesque and culturally distinct farming communities. This influx of visitors provides jobs and income for thousands of local workers and businesses.

Items and goods produced: television tubes and electronic equipment, textiles, watches, farm machinery, building materials, linoleum, steel containers, ball bearings, locks, aluminum products, pharmaceuticals, toys, furniture, candy and food products

Incentive Programs—New and Existing Companies

Through economic development organizations like the Economic Development Company of Lancaster County and other community organizations, a wide array of public financing programs are available to local businesses. Resources include funding for start-up and business development projects, technical assistance, business counseling and training, and access to local, state, and federal funding programs.

Local programs

Lancaster's Economic Company Finance Corporations administers a number of funding programs for area businesses. The Pennsylvania Small Business First Fund provides low-interest financing to manufacturing and industrial businesses with less than 100 employees; companies can borrow up to $200,000 for land acquisition, construction, machinery, and working capital. The Community First Fund offers fixed-rate loans up to $50,000 and business counseling to small businesses, nonprofit organizations, and housing development agencies for use in real estate, machinery and equipment, and leasehold improvements. The Penn Southeast Mezzanine Fund is for firms with high growth and earnings potential; it extends loans of up to $750,000 for acquisitions, equipment purchase, working capital, and real estate.

State programs

Pennsylvania's Department of Community and Economic Development is the main source of funding and other economic growth programs for state businesses. Funding programs offered by the state include bond financing, grants, loans and loan guarantees, tax credits and abatements, and technical assistance. The state's tools include the Job Creation Tax Credit Program, which provides a $1,000-per-job tax credit for businesses that create new jobs; 25 percent of the tax credits allocated each year must go to businesses with less than 100 employees. The Opportunity Grant Program provides funds needed to create or preserve Pennsylvania jobs to businesses involved in manufacturing, exporting, agriculture, and research and development. The First Industries Fund is a grant and loan program aimed at strengthening Pennsylvania's agriculture and tourism industries. Loans up to $200,000 can be used for land acquisition and construction, machinery purchase, and working capital. The state also runs a number of technology investment programs, which are designed to help create and bolster new and existing technology companies within the state. Program areas include funding, assistance programs, industry initiatives, and research and development.

Job training programs

The Lancaster County Career and Technology Center offers a wide range of trade and skill-development opportunities to students in Lancaster County. The center has been renovated and its facilities offer modern, state-of-the-art laboratories and training programs geared to today's labor market needs. The Career and Technology Center's Work Keys program helps employers with job applicant selection and provides businesses with assessment services to determine where additional training would help increase employee performance.

Development Projects

The city of Lancaster has been involved in numerous development projects. Many of them include renovations and additions to Lancaster's cultural and recreational venues, including the city's multi-purpose baseball stadium, the Academy of Music, the Quilt Museum, and the Franklin and Marshall Life Sciences Building. Transportation improvements include work on the Red Rose Transit Center, the Amtrak Station, and the Fruitville Pike Bridge. Recent expansion and renovation also took place at the Lancaster General Hospital and the premises of the Susquehanna Association for the Blind.

Economic Development Information: Economic Development Company of Lancaster County, Southern Market Center, 100 S. Queen St., PO Box 1558, Lancaster, PA 17608; telephone (717)397-4046. City of Lancaster Economic Development Department; telephone (717)291-4760

Commercial Shipping

Air transportation facilities are provided by Lancaster Airport; air cargo lines include American, Continental, Delta, Northwest, United, Airborne Express, FedEx, and UPS. Norfolk Southern Rail serves as the area's primary freight railroad; daily service is available. Small freight and air cargo service is also available. The Philadelphia Regional Port Authority, 68 miles east of Lancaster County, handles more than 5 million tons of cargo each year.

Labor Force and Employment Outlook

Lancaster's widely diversified economy is expected to continue to stand the city in good stead. The city lays claim to a skilled labor force with a Pennsylvania Dutch work ethic. More than 11,000 companies employ a workforce of more than 250,000 people, in sectors including manufacturing, services, retail, tourism, and agriculture. Lancaster's non-agricultural labor force has diminished over the last decade, while jobs in the construction and tourism industries have increased significantly.

The following is a summary of data regarding the Lancaster metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 232,100

Number of workers employed in . . .

construction and mining: 16,400

manufacturing: 45,700

trade, transportation and utilities: 50,800

information: 4,000

financial activities: 10,100

professional and business services: 21,400

educational and health services: 32,400

leisure and hospitality: 20,200

other services: 10,400

government: 20,800

Average hourly earnings of production workers employed in manufacturing: $15.35

Unemployment rate: 3.5% (May 2005)

Lancaster: Economy

Largest employers (2003) Number of employees
Lancaster General Hospital (no employee figures available)
R. R. Donnelley & Sons Co.
Mutual Assistance Group
Armstrong World Industries, Inc.
Lancaster County
Manheims PA Auction Services Inc.
Ephrata Community Hospital
Federal Government
School District of Lancaster
Weis Markets, Inc.
QVC, Inc.
Masonic Homes
Dart Container Corporation
Tyson Poultry, Inc.
Lancaster Lebanon Intermediate Unit

Cost of Living

According to the Economic Development Company of Lancaster County, the median rent within the county was $572 in 2000. The 2000 median housing value for the county was $119,300. Pennsylvania also has the lowest maximum income tax rate, 3.07%, of any state that imposes a personal income tax.

The following is a summary of data regarding several key cost of living factors for the Lancaster area.

2004 ACCRA Average House Price: Not reported

2004 ACCRA Cost of Living Index: Not reported

State income tax rate: 3.07% includes earned income plus interest

State sales tax rate: 6.0%

Local income tax rate: Lancaster County assesses an earned income and an occupational assessment tax that vary from municipality to municipality. It is based on one's occupation (therefore, an accountant would pay a different tax from a farmer, for example)

Local sales tax rate: None

Property tax rate: 2.96 mills based on 100% of fair market value (2005)

Economic Information: Lancaster Chamber of Commerce and Industry, Southern Market Center, 100 S. Queen St., PO Box 1558, Lancaster, PA 17608; telephone (717)397-3531; fax (717)293-3159