Manufacturing and the related distribution sector were traditionally the backbone of the Philadelphia economy. Since the end of World War II this industrial base has declined, as it has in many of the established industrial cities of the Northeast and upper Midwest, as many firms moved to new locations in the suburbs or migrated to other regions of the country. Today, the region has evolved into a more diverse economy geared toward information and service-based businesses.
Computer-based businesses, finance, telecommunications, insurance companies, and the printing and publishing industries are doing well. The biomedical field, encompassing hospitals, medical schools, pharmaceutical firms, research institutions, manufacturers of medical instruments and supplies, and medical publishing, is flourishing in Philadelphia. As manufacturing continues to recede, the city's educational and health institutions have come forward as important drivers of the regional economy. Education currently represents about 12 percent of city and 7 percent of suburban employment. Health services constitute about 18 percent of city jobs and 12 percent of those in the suburbs.
Few cities in the country can match Philadelphia's historic attractions, and the city plays host to millions of tourists each year. Thus, tourism remains an important segment of the local economy.
The Greater Philadelphia region has become one of the major corporate centers in the United States. Many companies are locating or expanding facilities in the area. They are attracted by the area's location at the center of the country's largest market, the access to transportation, the availability of medical, engineering, and business schools to supply technical talent, and the open land for industrial park development. Center City is still the financial, governmental, and cultural hub of the region. Concerted efforts over the last several years by government, business leaders, and concerned citizens to improve Philadelphia's reputation as a corporate host have borne fruit, and the city is continuing to be discovered as an attractive place to live and work.
Items and goods produced: chemicals, pharmaceuticals, office and computing equipment, telecomunications from fiber optics to celluar technology, instruments, biomedical products, fabricated metal products, paper products, processed foods, clothing, petrochemicals, machinery
Both Philadelphia and Pennsylvania sponsor programs to encourage business retention and growth.
The city's three empowerment zones provide additional tax incentives and financing to transform these areas into thriving neighborhoods for businesses and workers. Philadelphia Industrial Development Corporation enables the city to provide low-cost financing for acquisition, construction, and equipment. The city is eligible to receive state grants for site preparation and infrastructure for industrial development. Other programs provide individual businesses with low interest loans.
Funding programs offered by the state include bond financing, grants, loans and loan guarantees, tax credits and abatements, and technical assistance. The Key-stone Opportunity Zone has designated some 500 acres in a dozen zones throughout the Philadelphia area as exempt from state and local business taxes; these areas will remain virtually tax-exempt until 2013. Four state Enterprise Zones in Philadelphia are eligible for numerous incentives, including state tax credits, security rebates, low-interest loans, and technical assistance. The state's Job Creation Tax Credits program provides $1,000-per-job tax credit to approved businesses that agree to create jobs within three years.
The Philadelphia Industrial Development Corporation (PIDC) assists in the development of the workforce by partnering with the Philadelphia Workforce Development Corporation (PWDC), the Delaware Valley Industrial Resource Center, and the Collegiate Consortium to provide job training, program funding, and technical assistance. The PIDC offers a broad spectrum of qualified workers, and can customize programs such as on-the-job training, for which the employer receives some reimbursement; targeted programming for specific populations; customized training for specific job skills; recruitment, and referral and assessment aid. The PWDC Transitional Workforce Division provides training, support, education, employment, and other services to some of the region's most needy job seekers.
Since the completion of new international and commuter terminals, along with enhanced airport roadways at Philadelphia International Airport, other improvements included the consolidation of Terminals B and C, which resulted in a new food, beverage, and retail gallery.
The University of the Arts, on the heels of a new academic building with a recital hall, classrooms, a studio theater, dance studios, and lecture halls, has $379 million worth of new and planned investments proposed for the Avenue of the Arts District. A nearly $200 million family-oriented entertainment complex at Penn's Landing, to serve as the locus of a revitalized waterfront, opened in mid-2001. The $255 million Regional Performing Arts Center, a 5,000-seat venue on the Avenue of the Arts, opened in 2002. A $65 million master site plan for Independence National Historic Park was completed in late 2002.
In 2004 the School District of Philadelphia, in cooperation with the Microsoft Corporation, broke ground on the School of the Future, ushering in a new era of technology and education. The school, which is the first of its kind designed to be a model for improved instructional development through the use of technology, is expected to open in 2006 and cost an estimated $50 million. After receiving a $30 million commitment from the City of Philadelphia, the Free Library is preparing to renovate its Beaux Arts building and add 160,000 square feet of additional space. Final plans for the project were expected to be in place by December 2005. The city's Neighborhood Transformation Initiate has gained national attention as one of the most comprehensive neighborhood revitalization strategies ever attempted. The plan has created a framework for making neighborhoods cleaner and safer. A $100 million neighborhood revitalization project in the Cecil B. Moore Avenue area of North Philadelphia resulted in the completion of nearly 300 new homes. Plans are currently underway for a new mixed-use community along the Delaware River. The mayor's new Livable Neighborhoods Program focuses on improving Philadelphia's older neighborhoods.
The New River City initiative involves stimulating private investment along the city's waterfront. During 2004, the mayor and the Philadelphia Industrial Development Corporation announced a master plan that includes the potential for $2 billion of private investment and the creation of 25,000 new jobs. The lower Schuylkill River will be home to a newly constructed River Park and Trail as well as a host of new residential projects and a 700,000-square-foot office tower. Also underway are redevelopment plans for the Civic Center and main Post Office. Improvements are also planned for the North and Central Delaware riverfront zones.
The Pennsylvania Convention Center will soon undergo major new construction that will double the existing facility. When the project is completed, the Center will have 541,000 square feet available, two ballrooms totaling 93,000 square feet, 87 meeting rooms, and a fully equipped main kitchen.
Economic Development Information: Philadelphia City Planning Commission, One Parkway Bldg., 1515 Arch Street, 13th Floor, Philadelphia, PA 19102; telephone (215)683-4615; fax (215)683-4630; email firstname.lastname@example.org. Philadelphia Industrial Development Corporation, 2600 Centre Square West, 1500 Market Street, Philadelphia, PA 19101; telephone (215)496-8020
Philadelphia's port, together with the ports in southern New Jersey and Delaware, form the Ports of Philadelphia. The Ports of Philadelphia, the largest freshwater shipping complex in the world, handle the largest volume of international tonnage on the East Coast. Major imports include crude oil, fruits, iron, steel, and paper. Exports include scrap metal and petroleum products. Most of the terminals in the city are owned by the Philadelphia Regional Port Authority. With an infusion of state funds for capital improvements and the development of a new intermodal yard to serve three railroads—the Chessie, CSX, and the Canadian Pacific—the Philadelphia terminals are poised for growth. Philadelphia's Port, Penn's landing, is the largest freshwater port in the United States.
In the past, Philadelphia's economy was dominated by manufacturing, providing half of the city's jobs. But as manufacturing decreases, now accounting for just 5 percent of the city's employment, education and health have emerged as principal drivers of the local economy, accounting for 12 percent and 18 percent of the city's jobs, respectively. In addition, Philadelphia promotes itself as a center for biomedical and pharmaceutical companies. Few cities have the historical past of Philadelphia, and it remains a mecca for tourists.
The following is a summary of data regarding the Philadelphia city/county area labor force, 2004 annual averages.
Size of nonagricultural labor force: 655,800
Number of workers employed in . . .
construction and mining: 11,200
trade, transportation, and utilities: 90,400
financial activities: 48,300
professional and business services: 84,100
educational and health services: 182,700
leisure and hospitality: 53,400
other services: 28,000
Average hourly earnings of production workers employed in manufacturing: $15.73
Unemployment rate: 4.5% (April 2005)
|Largest employers||Number of employees|
|City of Philadelphia||30,000|
|Philadelphia School District||26,000|
|University of Philadelphia (incl. hospital)||22,605|
|Jefferson Health System||14,317|
|Merck and Company||10,000|
Housing prices in Philadelphia tend to be lower than those in comparably sized cities, and are among the lowest in the Northeast, with a median home price of just $59,700 in 2002. The housing stock dates from the 18th and 19th centuries and the city encourages preservation of the existing stock with federal, state, and private aid. The tax burden overall is high relative to other large cities nationwide.
The following is a summary of data regarding several key cost of living factors for the Philadelphia area.
2004 ACCRA Average House Price: Not reported
2004 ACCRA Cost of Living Index: Not reported
State income tax rate: 3.07%
State sales tax rate: 6.0%
Local income tax rate: 2.8%
Local sales tax rate: 1.0%
Property tax rate: 8.26% on every $100 assessed
Economic Information: Greater Philadelphia Chamber of Commerce, Business 200 S. Broad St., Suite 700, Philadelphia, PA 19107; telephone (215)545-1234