JoAnn Loviglio T 215.440.5546
FOR IMMEDIATE RELEASE
PHILADELPHIA (September 12, 2022) – Center City continued to show promising signs of recovery throughout the summer months, buoyed by returning conventions and office workers and increasing numbers of pedestrians who are contributing to rising retail and restaurant sales, local tax revenue, new business openings and increases in convention travel and hotel occupancy.
The just-updated Monitoring Philadelphia’s Economic Recovery quarterly report from Center City District/Central Philadelphia Development Corporation provides a snapshot of current conditions based on key economic indicators, commercial office market trends, retail and tourism data, tax collections, transit ridership, parking volumes and pedestrian activity in Center City.
Seasonally adjusted employment rose in July by 3,300 to 730,000 jobs. Philadelphia has thus recovered
82% of the 126,500 jobs lost in the first two months of the pandemic and the city’s total employment is now at 97% of where it stood in February 2020, while the 11-county Philadelphia metropolitan area is at 99% of pre-pandemic levels and the nation as a whole has regained all lost jobs.
“The city's shortfall of 23,100 jobs, however, is not evenly distributed across industries,” CCD President Paul R. Levy stated. “Employment in professional and business services, financial activities, health care and social assistance, wholesale trade and construction in the city exceeded February 2020 levels on a nonadjusted basis. By contrast, employment is still below pre-pandemic levels in manufacturing, retail trade, transportation, warehousing and utilities, information, educational services, leisure and hospitality and government.”
While the drop in educational employment is likely due to seasonal trends and the contraction in information services, which includes newspapers and publishing, is part of a long-term decline that pre-dates the pandemic, leisure and hospitality has been one of Philadelphia’s strong growth industries. Regionally and nationally, leisure and hospitality employment was at 102% of pre-pandemic levels in July, while in the city it reached only 91%.
The average daily number of pedestrians downtown in August was 320,690, up 8% compared to the same period a year earlier. The number of non-resident downtown workers in August rebounded to 56% of the pre-pandemic August 2019 level, while visitors were at 78% of the August 2019 level, and the average number of Center City residents present downtown was 17% higher compared to the same month in 2019.
Citywide wage and earnings tax collections were 109% of 2019 levels in the second quarter of 2022, equal to the level of the prior quarter. Sales tax collections stood at 111% of pre-pandemic level, down from 119% in Q1 2022. Hotel tax collections, although they have been the slowest to recover, continue to show a positive upward trend but still remain below the pre-pandemic level.
The growth in jobs has brought the city’s unemployment rate down substantially from the pandemic peak of 17.1% in April 2020 to 6.2% in July 2022. This is a slight increase from 5.7% in May 2022, but as with national figures and other Northeast cities, it is also a sign of more residents being drawn back to the labor force. The unemployment rate in Philadelphia is now lower than in New York but higher than in Atlanta, Boston, and Washington.
The uncertainty lingering since the pandemic has had a significant impact on the Center City office sector, where vacancy rates have exceeded 18% since the third quarter of 2021, up from 13% at the end of 2019. After two quarters of modest positive net absorption in 2021 Q4 and 2022 Q1, vacancy rates rose slightly in the second quarter of 2022, while asking rents remain stable. As many tenants are still determining their inoffice vs remote work balance, some have chosen to delay leasing renewal decisions and others have decided to take less space, while a handful in the life sciences and other industries have signed new leases downtown.
Based on CCD surveys of street-level premises within the District, the percentage of open businesses dropped from 88% at the end of 2019 to a low of 54.5% in June 2020, but rebounded to 80% by June 2022 as 175 new retailers opened since spring of 2020, including 43 opening throughout this year.
As conventions and trade shows have returned to Center City and leisure tourism has rebounded, the number of occupied hotel room-nights in Center City has continued to increase and 86.8% of 2019 levels as of July 2022. Average daily room rates have fully rebounded and, as of July 2022, were at 115.5% of 2019 levels.
The 11-page report, Monitoring Philadelphia’s Economic Recovery, featuring a narrative of trends, along with explanatory charts tracking the recovery, is available at centercityphila.org/research-reports.
Center City District, a private-sector organization dedicated to making Center City Philadelphia clean, safe and attractive, is committed to maintaining Center City’s competitive edge as a regional employment center, a quality place to live, and a premier regional destination for dining, shopping and cultural attractions. Find us at www.centercityphila.org.