Center City continues to prosper in every sector — from the economy to healthcare, education, culture, and more — yet, there is still room for improvement. According to the ‘State of Center City’ report published in 2018 by the Center City District (CCD) in conjunction with Central Philadelphia Development Corporation (CPDC) and Center City District Foundation (CCDF), positive growth is seen in Center City when compared to itself. However, when compared to other cities across America, there is plenty of room for improvement; for example, private sector jobs contribute to a 2.3 percent job growth rate nationwide, compared to only 1.4 percent in Philadelphia. A record-setting new construction boom in 2017 should pave the way for more affordable apartment rentals in Philadelphia over the next several years, relieving one of the biggest challenges facing our city.
Jobs and Office Space Outlook
Economic growth in Center City is encouraged by success in the private sector, as the public sector continues a constricted growth pattern upheld over the last 25 years. However, Center City hold fast to its position as the largest area employing the population, with 42% of Philadelphia’s jobs located within it. This is a total of 298,612 salaried positions added to 9,000 people who identify as self-employed, freelancers, or those receiving partner compensation.
Professional, business and financial services, real estate, and information industries accounts for 40 percent of jobs in Center City, and these industries rely heavily on office space. These offices take up 41.2 million square feet. While the rest of Philadelphia sees a heavy reliance on education and health services, these industries come second to the aforementioned professional services in Center City, accounting for only 20 percent of Center City employers. Entertainment/hospitality/retail accounts for 16 percent of downtown jobs, while government positions account for 12 percent of employment opportunities.
55,100 jobs have been added to Philadelphia’s economy since 2010, with an astounding 44 percent of these openings within the last two years. This expansion period is the longest streak Philadelphia has seen in 50 years.
While the employment outlook is positive, Philadelphia still has a ways to go to combat its 26 percent poverty rate, which is the highest among the 10 largest cities in the U.S. The current unemployment rate, as of 2017, is 6.2 percent.
Plenty of transit opportunities make Center City an ideal destination for employers and their employees. People who visit Center City for business reasons account for nearly 35 percent of hotel room reservations. Rental prices are approximately $30.59/square foot, which recently rose from $29.60/square foot, but is still well below other nearby markets, including Manhattan and Boston.
Higher Education and Healthcare Sectors
Across Philadelphia, the higher education and healthcare industries are integral to the fabric of the community, accounting for 32 percent of jobs city-wide and 20 percent of jobs in the downtown area. Drexel, Temple, Jefferson, and Penn combined account for $1.79 billion in research spending. These institutions are also responsible for 29 startups, 316 patent applications, and $51.8 million generated from active licenses. Philadelphia is fourth in the nation for National Institutes of Health grants, totaling $924 million.
Conventions, Tourism and Hotels
Philadelphia is well-known in the convention and hospitality industries as a great place for businesses to host meetings. With the Pennsylvania Convention Center, Museum of the American Revolution, and numerous other hotels, museums, and other cultural hot spots, Philadelphia is also becoming a major tourist attraction. More than 16,400 jobs in Philadelphia are dedicated to the hospitality industry, and the industry itself provides an economic boost to the city. Notably, the NFL Draft was located at the Pennsylvania Convention Center in 2017, bringing in 250,000 visitors and and generating $94.9 million for the city.
Tourism, as seen through the booking of leisure hotel nights, has been boosted by 61 percent since 2008, thanks to the Visit Philadelphia marketing pushes. The organization is gearing up for highlighting the extensive food scene in Philadelphia, based on data stating that 81 percent of vacationers will travel for food. So many tourists are visiting Center City that the area plans to create an additional 13,000 hotel rooms by 2021. Aside from new construction, current hotels are undergoing renovations to remain competitive.