Jun. 25--An analysis by an international economic forecasting firm says that Lebanon County is faring better than many areas during the recession but could face growth issues in coming years.

The report, issued in May by Moody's Economy.com Web service, http://www.economy.com, "talks about our strengths and weaknesses," said Charles Blankenship, president of the Lebanon Valley Economic Development Corp., which received notification of the results from FirstEnergy.

Moody's is "a leading independent provider of economic analysis, data, and forecasting and credit risk resources," its Web site states.

"The recession in Lebanon is intensifying, but the metro area is holding up better than the state and the nation," the report indicated. It cited Lebanon's unemployment rate, one of the lowest in the state, and noted that food manufacturers "are less cyclically sensitive than other manufacturing industries and make up a large share of overall employment."

In addition, Lebanon's "mild housing market bubble has put less strain on home builders and household balance sheets alike," the report said.

"I think the strengths they got right," Blankenship said of the report. "We have a relatively strong industrial base, especially in food manufacturing. Our analysis agrees with that. We're seeing some selective manufacturing growth in construction materials."

Blankenship cited companies like Valspar and Everlast Roofing among those that have recently opened or expanded here.

"We also have some biomedical companies (that are growing or expanding), like Schott (Pharmaceuticals) and the new Hawk Acres (Enterprise Place) occupant," which has not yet been identified, he added.

One out of five Lebanon jobs is in manufacturing, the report said, predicting that manufacturing will contract into 2010. It noted that national food-manufacturing employment in the past year has declined 0.5 percent, compared to a total manufacturing decline of 10.6 percent.

Because nominal income and house prices were still rising in Lebanon as of the fourth quarter of 2008, "consumers maintain relatively similar spending habits as they did before the recession," the report states. "This has and will continue to bode well for Lebanon's consumer-driven industries, which account for nearly one out of every five jobs."

Blankenship disagreed with the report's prediction that population growth will dip below the national average and the report's contention that "the aging and less educated workforce, and lack of drivers hamper progress."

"They think we'll track below the national average in population growth," he said. "Our other information shows higher-than-average growth."

Lebanon County high-school graduates are going to college "in greater numbers than in the past," Blankenship continued. He said the county has its largest number of 14- to 24-year-olds ever, describing it as a "baby boomlet" that will lessen the effect of a growing number of retirees.

The report conceded that Lebanon's population growth exceeded the national average between 2003 and 2007, which it attributed to "high housing affordability and a low cost of living" that attracted new residents from other areas. In 2008, that influx slowed due to the housing recession that reduced mobility, causing growth to slow below the national pace.

Growth will decline further "to a level more closely resembling the pace in the 1990s as housing affordability in neighboring metro areas aligns with that of Lebanon," the report predicted. "This slow population growth will hamper growth in retail and other consumer services."

In summary, the report forecasts that Lebanon's economy "will contract into next year, but the pace of decline will be slower than the state and the nation. ... Longer term, the metro area will experience sub-par growth as businesses are deterred by an older and less-educated workforce."

SteveSnyder@LDNews.com

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