Centre County economy battles back from the trials of the recession

mmorgan@centredaily.comFebruary 9, 2013 

  • Unemployment stats


    Centre: 5.7 % State: 7.8

    Centre 2011 : 5.7 percent — State 2011: 7.9

    Centre 2010 : 6.2 percent — State 2010: 8.5

    Centre 2009 : 5.7 — State 2009: 8.0

    Centre 2008 : 4.3 — State 2008: 5.4

    Non-seasonally adjusted numbers via Pennsylvania Department of Labor and Industry

From 2008 to 2011, Happy Valley’s smile may have waned a little — but just a little.

As the national recession hit all parts of the country, Centre County’s unemployment jumped from below 4 percent and capped out above 6 percent. But it was still well below the commonwealth’s 8.7 percent high, and it stayed at the bottom or near the bottom compared to other counties in the state.

Penn State, the health care industry and the technology industry weathered the storm rather well. The same can’t be said for industries such as real estate. But even where the county took hits, it wasn’t as bad as many other places.

And by 2011-12, even those that took hits were rebounding and looking to be set up favorably going forward.

Real estate

One of the industries that took a hard hit from the recession was real estate. But Centre County Association of Realtors President Nancy Ring said it wasn’t as bad in Happy Valley as it was elsewhere.

“State College is a very stable area,” she said, citing the university as a reason.

Ring said professors and young professionals usually are looking for homes, but dating back to 2006, prices were high and homes started to become harder to move.

She said residents who bought homes and tried to sell them in the same year weren’t getting back as much as they paid because of depreciation.

In the past year, the market has begun to rebound. Ring said homes are appreciating and condos and houses in downtown State College and the surrounding area are moving.

The county recorded back-to-back quarters of double-digit residential sales growth through September 2012 compared to 2011 figures, with a 13.4 percent jump in the third quarter alone. The county’s second quarter of 2012 closed listings that almost doubled the national average of growth, boasting a 22.4 percent increase in sales.

Ring is optimistic that trend will continue.

She said her crystal ball is fuzzy because federal government decisions and the economy affect the housing market, but she thinks the market will stay steady at least the next three years.


Local technology-based businesses largely weathered the storm of the recession well, but information technology professionals lost jobs mostly because of other businesses closing or laying off their technology staffs, said Shawn Clark, executive director of the Institute for Global Prescience at Penn State.

“It’s indirect impact,” he said. “The core technology firms are very stable and doing well.”

Other industries, such as manufacturing, have been largely “hollowed out,” he said.

The lack of manufacturing technology is something that is holding back the technology companies, said Irene Petrick, Penn State College of Information Sciences and Technology senior lecturer.

Petrick said that in the immediate future, companies should be investing in technical skills, and five to eight years out that focus should switch to 3-D manufacturing and printing as the price continues to drop.

But the critical component for creating more technology jobs and startup businesses will be the university, she said.

Clark agreed, saying that the town needs to keep the university graduates to open local startup technology companies. If that happens, the town could “explode with technology jobs,” he said.

“The university, to me, is the critical success factor for economic growth in State College,” he said.


Betsey Howell said it wasn’t harder to promote the area from 2008 to 2011 but it was harder to get people excited about travel when they didn’t have the money to spend.

The executive director of the Central Pennsylvania Convention and Visitors Bureau, Howell said tourism, like many other industries, was stronger in the 2011-12 fiscal year, but last fall was a little slower than normal. There is no clear reason for the drop-off but Howell said it takes more hard work to get back on track.

“We are continuing to market and promote the area as we always have,” she said. “I think it truly takes everybody working together. This is a great area. In my mind there’s no doubt about that.”

Unlike other industries, Howell doesn’t see Penn State as the lone driving force.

She said the university “put the county on the map,” but there are many other reasons to come to Centre County. A study showed that one of the biggest reasons people want to visit the area is the scenery.

Howell cited a few other big draws such as Penn’s Cave, Tussey Mountain, the historical sites and communities such as Bellefonte, Boalsburg and Philipsburg.

“There’s a lot of things that help make this area attractive to visitors,” she said. “Penn State is one of them.”

She also remains optimistic that the numbers will start to increase again over the next couple of years.

Health care

Health care didn’t take too much of a dent from the recession, Mount Nittany Health System CEO Steve Brown said.

The hospital largely is paid through insurance and contracts, so Brown said there was nothing definitive to point to a recession.

Mount Nittany, Geisinger Health System and Penn State Hershey’s University Park Regional Campus continue to expand locally and will continue to do so in the near future.

Geisinger’s county facilities saw a little softer demand the past couple of years in terms of preventative care and non-urgent problems, but that has been coming back on track, Regional Medical Director Raymond Nungesser said.

With projects such as Mount Nittany’s expanded operating rooms and Geisinger’s $42 million, 80,000- square-foot addition to its Gray’s Woods facility, Gene Marsh said the community is set up well for the future.

Marsh is the Penn State College of Medicine senior associate dean of the University Park Regional Campus and associate director of the Penn State Hershey Medical Group in State College.

“I think there’s no question that the future is very bright,” he said.

The Penn State factor

The university is the rock.

When the rest of the world hits hard economic times and job losses are prevalent, Centre County’s stays at or among the lowest unemployment rates in the state because Penn State isn’t cutting back.

With 24,709 workers, Penn State employs more than the rest of the top 40 employers in the county combined, which helps to keep a steady population and is a boon to all the county businesses, said Dave Brown, senior lecturer of economics at the university.

“I’d say (large universities are) probably better protected against recession compared to other goods and services that people could buy,” he said. “People still generally view college as a good investment.”

Brown said if demand doesn’t drop for the university and its services, Penn State will continue to employ people, grow and keep a stable population, which is key to staving off effects of a recession.

A major factor when dealing with a struggling economy is labor mobility, he said. When people lose their jobs, they tend to go where they think they can find work, further hurting the area. In Centre County, the university will continue to attract 40,000 or more students year after year who all spend money on goods and services.

‘You have sort of this captive population here,” he said “What that does is just increases demand for all sorts of products.”

Penn State employees also aren’t looking to move as much.

Professors working toward tenure are less likely to change professions or leave the area, he said.

The Sandusky influence

A downtown economy that largely relies on home football weekend traffic was less vibrant in fall 2012.

While the NCAA sanctions against the football team didn’t have the sting that some people feared, a lower average attendance did hurt some businesses. The sanctions included a four-year bowl ban, $60 million fine, reduction of scholarships and vacating more than 100 wins.

Tavern restaurant owner Pat Daugherty said his business was down about 10 percent from the previous football season. Hotel State College owner Mike Desmond said his businesses had a “small dent” during the season. Desmond owns The Corner Room, Zeno’s Pub, Bill Pickle’s Tap Room, Allen Street Grill, Chumley’s and Indigo.

But Howell said in her experience percieved outside hostility toward the area has been overblown. People outside State College aren’t as anti-Penn State as some have voiced.

She said it’ll take work to completely restore the town’s reputation, but it’s something she says is already happening.

“I believe our county has so much to offer, not just to visitors but new business,” she said. “We have to move forward and work together and partner to make it exciting and make people want to come here.”

Matt Morgan can be reached at 235-3928. Follow him on Twitter @MetroMattMorgan.

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