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Economic Development History of I-81 Corridor

Interstate 81 Pennsylvania shield

Interstate 81 in Pennsylvania

Interstate 81 (I-81) is a north-south Interstate Highway connecting a northern terminus at the US-Canadian border along the Saint Lawrence Seaway, to a southern terminus at Interstate 40 in Tennessee. This study focuses specifically on the 234-mile portion of I-81 running through eastern Pennsylvania. The Interstate facilitates the movement of people, goods, and services among the relatively smaller population centers along the route, and provides an alternative to the more heavily traveled I-95. I-81 facilitates a relatively high volume of truck traffic and has fostered the development of logistics, distribution, and various manufacturing establishments along the route.

1.1 Project Length/Location

I-81 is the longest north-south Interstate Highway link in Pennsylvania, comprising of a total of 234 miles within in the state, as illustrated in Figure 1. I-81 connects the state capital, Harrisburg, and its metropolitan area with the Wilkes-Barre/Scranton metropolitan area further north. Along the route, I-81 passes through the counties of Franklin, Cumberland, Dauphin, Lebanon, Schuylkill, Luzerne, Lackawanna, and Susquehanna. Beyond Pennsylvania to the south, I-81 links to the Hagerstown, MD metropolitan area and as far south as Virginia and Tennessee. Beyond Pennsylvania to the north, I-81 links to the Binghamton, NY metropolitan area, the Syracuse, NY metropolitan area, and the Canadian border at the Saint Lawrence Seaway.

Figure 1: Map of I-81 in Pennsylvania

Map shows I-81 from SW to NE in East Central Pennsylvania with Franklin County in the SW and Susquehanna County in the NE. The map shows that 3 counties, Franklin, Susquehanna and Schuylkill counties are non-metropolitan.

1.2 Details of Construction

I-81 in Pennsylvania is officially named the "American Legion Memorial Highway." Construction began in 1958 with sections of I-81 built from Scranton to the New York State line. During the period from 1960 to 1963, various sections of the new Interstate Highway opened: the southern end from the Maryland line, the northern end from the New York State line, and in the middle of the route - around the Scranton and Harrisburg areas. This was followed, during 1964-1965, with the start of construction of the remaining parts of the corridor, which were completed during 1965-1969. In 2001, Pennsylvania DOT agreed to seven widening projects along a 77-mile stretch of four-lane highway on Interstate 81, starting from the Maryland line to the Interstate 78 split north of Harrisburg. The Pennsylvania portion of the I-81 corridor cost an estimated $3.3 billion dollars (2012$).

1.3 Reason for Project Development

Within the Commonwealth of Pennsylvania, the route of I-81 was originally planned in the 1950's to be a toll highway, providing a continuation of the Pennsylvania Turnpike's northeast extension from Scranton, PA to the New York/Pennsylvania State Line. After the passage of the Federal-Aid Highway Act of 1956, the highway was designated as an Interstate route providing passage along the Appalachian Mountains. It was designed as a diagonal route, providing a north-south connection between the east-west routes of I-40, I-70, I-80 and I-90.

The highway evolved, however, to become a major shipping route for bringing local agriculture and manufacturing products to northern and southern markets. Within the last decade, the corridor had a marked increase in Interstate truck transportation and distribution facilities as the highway have become a major route for Interstate truck traffic. I-81 is the less congested alternative to the heavily used I-95 and bypasses the New York City area. I-81 also serves commuters and tourist as a method to reach jobs and attractions in the region.

1.4 Traffic Counts

In addition to significant local passenger and commercial traffic, I-81 is heavily trafficked by trucks moving through the corridor due its geographic location, north-south orientation, and proximity (i.e., same-day drive time) to major population centers along the Atlantic Coast. Segments of I-81 exhibit some of the highest percentages of truck traffic compared to the Interstate System. It is considered one of the most strategically important north-south trucking routes. Statistically, on some segments, one in three vehicles would be classified as a heavy commercial vehicle. Originally, the Interstate System was designed to accommodate truck traffic. It was assumed that 15% of all vehicular traffic would be categorized as truck traffic, but I-81 is well beyond that design threshold for a majority of the segments within the Commonwealth.

A significant portion of the heavy commercial vehicle traffic moves goods from manufacturing plants to distribution centers through major population centers along the route and along the Eastern Seaboard. I-81 serves as a viable north-south alternative to the more congested, and sometimes tolled, portions of I-95.

Due to the concentration of heavy commercial vehicles along the route, there have been safety concerns raised by operators of passenger vehicles. Options put forward for limiting heavy vehicle traffic on I-81 include truck-only lanes, highway expansion, and alternative transportation mode development to divert trucks from the highway.

Traffic levels have been measured at various points along I-81 and averaged by county. Total traffic activity has remained highest in two of the most urbanized parts of the corridor: Cumberland and Dauphin County (Harrisburg area) and Lackawanna County (Scranton area).

Table 1: Annual Average Daily Traffic on I-81 in Pennsylvania: 1982-2009
Community 1982 2002 2009 Compounded Average Annual Growth Rate
1982-2002 2002-2009 1982-2009
Franklin* 18,332 42,351 40,057 4.3 % -0.8% 2.9%
Cumberland 21,542 53,290 52,429 4.6 % -0.2% 3.3%
Dauphin 34,809 66,371 77,333 3.3 % 2.2% 3.0%
Lebanon 14,814 40,623 37,500 5.2% -1.1% 3.5%
Schuylkill* 10,742 27,164 27,727 4.7% 0.3% 3.6%
Luzerne 21,618 43,414 45,800 3.5% 0.8% 2.8%
Lackawanna 20,964 47,032 46,231 4.1 % -0.2% 3.0%
Susquehanna * 14,657 25,057 23,500 2.7 % -0.9% 1.8%

*Indicates counties classified as non-metropolitan by the U.S Office of Management and Budget in 2004
Source: Pennsylvania Department of Transportation

The high traffic levels in Cumberland County and Luzerne County reflect the high level of Interstate Highway connections to major markets. Cumberland County is where the I-81 connects with I-76 (the Pennsylvania Turnpike Main Line) which goes eastward to Philadelphia and westward to Ohio and the Midwest. It is also where I-81 connects with I-83, which goes south to Baltimore and connects with I-95 to serve Washington, DC. Luzerne County is where I-81 connects with I-80, which also goes west to Ohio and east to New York City. It is also where I-81 connects with I-476 (the Pennsylvania Turnpike northeast extension to Philadelphia).

The county with the lowest levels of Annual Average Daily Traffic (AADT) along I-81 was Susquehanna County, which had the lowest percentage growth of AADT over all periods shown in the table, resulting in just a 1.8% annual growth rate over the full 27 years considered. Lebanon and Schuylkill Counties had the highest compounded growth over the period, at 3.5% and 3.6%, respectively. Since I-81 is actually a southwest-northeast diagonal route, it has significant levels of northbound traffic turning off to travel eastbound onto I-78 (towards Allentown and New York City) and onto I-84 (towards New England). As a result, the lowest levels of overall traffic volume have been in Lebanon County (which includes areas just north of the I-78 interchange) and in Susquehanna County (which is well north of the I-84 interchange).

2 The I-81 Corridor: Pennsylvania

2.1 Physical Features of I-81 Corridor

I-81 through Pennsylvania follows the curving northeastern course of the Appalachian Valley for most of its path through the State. At the southern end, the route also crosses the Susquehanna River, the 16th largest in the United States, at Harrisburg. Upon reaching Scranton, approximately 50 miles south of the Pennsylvania-New York border, the route turns directly northward over a geographic plateau which extends well into New York.

2.2 The I-81 Highway Network

Just south of Pennsylvania, at Hagerstown, Maryland, I-81 connects to I-70, providing access to Baltimore and Maryland to the east and to Pittsburgh and the I-68 corridor to the west.

Upon crossing into Pennsylvania, the Interstate's first significant junction is the Chambersburg junction with U.S. Route 30, an east-west highway that extends across the country from Atlantic City, New Jersey to the Oregon Coast. Shortly thereafter, in the Harrisburg area, I-81 connects to I-78, which connects central Pennsylvania to New York City, and I-76, which connects northeast Ohio to Pittsburgh and then crosses the southern half of the state before terminating in the Philadelphia area.

I-81 crosses I-80 just south of Wilkes-Barre. I-80 is the second-longest Interstate in the U.S., which connects San Francisco to Chicago and New York City.

2.3 Counties and Communities along I-81 Corridor[1]

In reviewing these county overviews, it should be noted that the first four (comprising the southern half of the corridor) are characterized by agriculture, trucking and warehousing industries, and new economic growth. The second four (comprising the northern half of the corridor) are noted more for their historical legacy of timber and coal industries that had formerly dominated that region. The northern half continues to struggle to diversify beyond their industrial past.

Franklin County: is located in south central Pennsylvania between Philadelphia and Pittsburgh. The southern boundary of the County is also the boundary between Pennsylvania and Maryland. The county encompasses an area of 754 square miles and has a 2011 population of about 150,811. Franklin County ranks second in the state in the production of milk, cattle and calves, barley, corn for silage, and peaches. The county is ranked second in terms of number of cows. Currently, the county has 1,540 farms consisting of more than 241,000 acres based on Franklin County's State of Agriculture report. In 2011, Farm Earnings accounted for $94 million in the county.[2]

Cumberland County: is located in the Cumberland valley, on a stretch of 42 miles from the borough of Shippensburg on the west to the banks of the Susquehanna River on the east. The county is a few minutes from Harrisburg, Hershey, Gettysburg, and Lancaster, and two hours from Philadelphia, Washington, and Baltimore. Cumberland County has an estimated population of about 237,892. In 2011, the transportation and warehousing industry contributed nearly $773 million in personal earnings.[3]

Dauphin County: is the home of Harrisburg, Pennsylvania's capital city as well as the county seat. Dauphin County has an estimated population of about 268,977. The county's 557 square miles host mountains, valleys, streams, wildlife and farmland. Dauphin County produces steel, candy, electronics, and medical products. In 2011, food manufacturing accounted for $276 million in earnings.[4]

Lebanon County: is located at the center of the southeastern quadrant of Pennsylvania. It has a land area of approximately 363 square miles and an estimated population of about 134,311. Having over 40% of the land as cropland, the county ranks high for farm earnings in Pennsylvania coming in a little after Franklin County with $78 million in earnings from farms in 2011. Although Lebanon County is known for its agriculture, more than one third of the workforce is employed in manufacturing. In the same year, total earnings in Manufacturing Industry accounted $507 million.[5] Wood product manufacturing and fabricated metal product manufacturing are among the highest contributing industries in Lebanon.

Lackawanna County: was created on August 13, 1878 from part of Luzerne County and has a population of about 214,166. Scranton, the county seat, was named for the Scranton family, its founders. Lackawanna County is a part of Pennsylvania's northeast Territory, and encompasses a blend of historical attractions, outdoor recreation, social, and cultural events, and natural scenic byways. Manufacturing accounted for $571 million of total personal earning in 2011.

Luzerne County: is located in the heart of northeastern Pennsylvania and is known for its natural beauty. Luzerne County has an estimated population of about 320,651. The Luzerne County area is rich with coal and timber products. Health care, government and warehousing businesses are the county's major employers. Major products include semi-conductors and non-metallic mineral product manufacturing. In 2011, the manufacturing industry accounted $865 million in earnings. The transportation and warehousing industry accounted for $462 million in earnings.[6]

Susquehanna County: located in the northeast corner, covers 535,040 acres of mountainous country-side and has a population of about 43,192. Sixty percent of the County's land area is covered with forest. In general, Susquehanna County is surrounded with hills, valleys, lakes and streams. While the Timber Industry has declined elsewhere in Pennsylvania, Susquehanna County has maintained a highly specialized industry of maple wood used for furniture. Tourism also remains strong. In 2011, personal earning in the accommodations industry and lodging, accounted $27 million in personal earnings.[7]

Schuylkill County: is located in northeastern Pennsylvania, encompasses a land area of 783 square miles, and has an estimated population of 147,513. This large rural county is known for timber and anthracite coal reserves. Agriculture, manufacturing, transportation and warehousing industries are among their largest employers. Schuylkill County produces apparel/textiles, plastics, fabricated and primary metals, lumber and wood products (modular homes), chemical, and allied products and food products.

3 Socioeconomic Trends in the I-81 Corridor

This section presents socioeconomic data for all counties served by I-81 in Pennsylvania State. In order to better understand the socioeconomic growth and changes along the I-81 corridor, all counties have been grouped into two regions: the southern half of the corridor and the northern half of the corridor (northeastern area).

We define the I-81 Southern Region as Franklin, Cumberland, Dauphin, and Lebanon counties; and the I-81 Northern Region as Lackawanna, Luzerne, Schuylkill, and Susquehanna counties. Measures of property value and residential construction trends rely on data for the Harrisburg/Lebanon/Carlisle MSA to represent trends for the broader Southern Region, and data for the Scranton/Wilkes-Barre/Hazleton MSA to represent trends for the broader Northern Region.

3.1 Population

Comparing population growth along the Pennsylvania I-81 corridor between 1969 and 2011, it is clear that the population has continued to grow steadily in the southern part of the corridor, though not in the northern part. As seen in Table 2, the Southern Region had nearly 200,000 fewer people than the Northern Region as of 1969. However, population in all counties in the Southern Region grew at double the state's pace, growing at an average annual rate of 0.58% during 1992-2002 and 0.98% over 2002-2011. By contrast, the Northern Region experienced an annual population loss of 0.38% from 1992-2002, before it rebounded and grew at an annual rate of 0.1% over the 2002-2011 period. This past trend of shifting population from the northern to the southern part of the corridor reflects changes in employment levels and industry mix, which are discussed later.

Table 3: Population Trends along I-81 Corridor: 1969-2011
County 1969 1972 1982 1992 2002 2009 2011
Franklin* 99,529 103,103 114,688 124,095 131,998 148,662 150,811
Cumberland 154,873 163,994 181,377 201,582 217,318 233,910 237,892
Dauphin 223,454 226,752 233,019 242,892 254,339 267,090 268,977
Lebanon 98,809 103,414 110,574 116,066 121,698 132,959 134,311
Southern Region 576,665 597,263 639,658 684,635 725,353 782,621 791,991
Lackawanna 234,040 235,697 225,401 219,463 211,980 214,138 214,166
Luzerne 342,597 349,278 339,054 331,542 315,711 320,527 320,651
Schuylkill* 161,154 163,548 158,198 154,751 148,705 148,358 147,513
Susquehanna* 34,224 36,302 37,788 41,039 42,410 43,346 43,192
Northern Region 772,015 784,825 760,441 746,795 718,806 726,369 725,522
Corridor 1,348,680 1,382,088 1,400,099 1,431,430 1,444,159 1,508,990 1,517,513
Pennsylvania 11,741,000 11,904,541 11,845,146 12,049,450 12,331,031 12,666,858 12,742,886

*Indicates counties classified as non-metropolitan by the U.S Office of Management and Budget.
Source: Bureau of Economic Analysis

Table 3.1: Compound Average Annual Growth Rates along I-81 Corridor: 1969-2011
1969-1972 1972-1982 1982-1992 1992-2002 2002-2009 2009-2011
Franklin* 1.2% 1.1% 0.8% 0.6% 1.7% 0.7%
Cumberland 1.9% 1.0% 1.1% 0.8% 1.1% 0.8%
Dauphin 0.5% 0.3% 0.4% 0.5% 0.7% 0.4%
Lebanon 1.5% 0.7% 0.5% 0.5% 1.3% 0.5%
Southern Region 1.2% 0.7% 0.7% 0.6% 1.1% 0.6%
Lackawanna 0.2% -0.4% -0.3% -0.3% 0.1% 0.0%
Luzerne 0.6% -0.3% -0.2% -0.5% 0.2% 0.0%
Schuylkill* 0.5% -0.3% -0.2% -0.4% 0.0% -0.3%
Susquehanna* 2.0% 0.4% 0.8% 0.3% 0.3% -0.2%
Northern Region 0.6% -0.3% -0.2% -0.4% 0.1% -0.1%
Corridor 0.8% 0.1% 0.2% 0.1% 0.6% 0.3%
Pennsylvania 0.5% -0.1% 0.2% 0.2% 0.4% 0.3%

3.2 Employment

Between 1969 and 2011, the employment along the I-81 corridor grew by 281,849 jobs. The I-81 Northern Region experienced negative employment growth from 1972 until 1982. The Northern Region added just 70,389 jobs from 1982 to 2011, growing at a modest rate. The I-81 Southern Region added 163,693 jobs in the same time period to increase its job base by 46.8%. This rate outpaced the rest of the State's overall job growth of 32% between 1982 and 2011. This past pattern of the locus of jobs moving from the northern to the southern part of the corridor reflects changes in the industry mix.

Table 4: Total Employment: 1969-2011
County 1969** 1972** 1982** 1992** 2002 2009 2011
Franklin* 45,921 46,239 52,664 61,679 65,384 73,662 74,118
Cumberland 68,120 77,896 100,595 136,189 154,612 153,824 156,548
Dauphin 134,132 137,959 150,587 185,273 210,485 220,928 218,513
Lebanon 44,564 44,721 46,129 52,293 55,588 62,643 64,489
Southern Region 292,737 306,815 349,975 435,434 486,069 511,057 513,668
Lackawanna 102,021 102,855 99,099 114,478 121,254 127,430 126,609
Luzerne 144,497 146,102 142,814 158,402 169,313 172,075 174,691
Schuylkill* 64,006 62,670 58,627 62,367 61,938 63,963 63,994
Susquehanna* 11,200 11,283 11,713 13,642 15,683 16,245 17,348
Northern Region 321,724 322,910 312,253 348,889 368,188 379,713 382,642
Corridor 614,461 629,725 662,228 784,323 854,257 890,770 896,310
Pennsylvania 5,249,940 5,246,647 5,473,792 6,216,278 6,908,759 7,120,155 7,222,267

*Indicates counties that are classified as non-metropolitan by the U.S Office of Management and Budget.
**Based on SIC Full and Part-Time Employment
Source: Bureau of Economic Analysis

Table 4.1: Compounded Average Annual Growth of Total Employment, 1969-2011
1969-1972 1972-1982 1982-1992 1992-2002 2002-2009 2009-2011
Franklin* 0.2% 1.3% 1.6% 0.6% 1.7% 0.3%
Cumberland 4.6% 2.6% 3.1% 1.3% -0.1% 0.9%
Dauphin 0.9% 0.9% 2.1% 1.3% 0.7% -0.5%
Lebanon 0.1% 0.3% 1.3% 0.6% 1.7% 1.5%
Southern Region 1.6% 1.3% 2.2% 1.1% 0.7% 0.3%
Lackawanna 0.3% -0.4% 1.5% 0.6% 0.7% -0.3%
Luzerne 0.4% -0.2% 1.0% 0.7% 0.2% 0.8%
Schuylkill* -0.7% -0.7% 0.6% -0.1% 0.5% 0.0%
Susquehanna* 0.2% 0.4% 1.5% 1.4% 0.5% 3.3%
Northern Region 0.1% -0.3% 1.1% 0.5% 0.4% 0.4%
Corridor 0.8% 0.5% 1.7% 0.9% 0.6% 0.3%
Pennsylvania 0.0% 0.4% 1.3% 1.1% 0.4% 0.7%

*Indicates counties that are classified as non-metropolitan by the U.S Office of Management and Budget.
Source: Bureau of Economic Analysis

From 1972 until 1992, the employment growth in the Southern Region counties outpaced the State's annual employment growth, with the exception of Lebanon County. On the other hand, the employment growth in the Northern Region has been sluggish compared to the State as a whole over the periods considered. The compounded annual employment growth rate in Susquehanna County, however, has been moving upwards significantly since 1982 and has outpaced the State growth of from 1982 to 1992, 1992 to 2002, 2002-2009, and by a full 2.6 points over the State rate between 2009 and 2011.

Table 5 displays unemployment levels and rates by county in selected years from 1990 to 2010. This again highlights the Southern Region's much healthier labor market over the Northern Region in terms of employment.

Table 5: Average Annual Unemployment by County: 1990-2010
County 1990 2000 2010
Labor Force Level Rate Labor Force Level Rate Labor Force Level Rate
Franklin* 62,815 3,131 5.0% 67,506 2,539 3.8% 80,616 6,425 8.0%
Cumberland 109,150 4,075 3.7% 113,787 3,596 3.2% 122,817 8,546 7.0%
Dauphin 130,438 6,256 4.8% 131,276 4,628 3.5% 138,301 11,207 8.1%
Lebanon 61,562 2,983 4.8% 64,143 2,039 3.2% 73,560 5,188 7.1%
Southern Region 363,965 16,445 4.5% 376,712 12,802 3.4% 415,294 31,366 7.6%
Lackawanna 106,094 7,552 7.1% 103,664 4,691 4.5% 106,952 9,680 9.1%
Luzerne 156,674 11,767 7.5% 155,492 8,043 5.2% 160,740 15,804 9.8%
Schuylkill* 69,719 5,444 7.8% 69,960 4,121 5.9% 73,459 7,522 10.2%
Susquehanna* 18,227 1,240 6.8% 20,362 803 3.9% 22,381 1,884 8.4%
Northern Region 350,714 26,003 7.4% 349,478 17,658 5.1% 363,532 34,890 9.6%

*Indicates counties that are classified as non-metropolitan by the U.S Office of Management and Budget.
Source: Bureau of Labor Statistics

3.3 Personal Income

Real per capita income is defined as income per person or the average income per person within an economic unit. Using that definition, it is clear that average income in the I-81 Northern Region remains comparatively lower than the I-81 Southern Region, even though incomes are on the rise in both areas. As of 2011, the Northern Region average household income was $35,201, while average household income in the Southern Region was $39,796. The only county in the Southern Region of the I-81 with a notably lower average income was Franklin County, which is an agro-industry area predominantly. Conversely, the per capita income of Lackawanna County in the Northern Region, home to Scranton, was at par with the Southern Region.

Table 6: Real Per Capita Income along I-81 Corridor: 1969-2011
County 1969 1972 1982 1992 2002 2009 2011
Franklin* $17,963 $18,933 $22,010 $27,457 $32,936 $34,089 $34,890
Cumberland $19,685 $21,530 $25,106 $34,706 $41,708 $41,877 $43,313
Dauphin $18,596 $21,188 $24,900 $33,624 $40,401 $40,797 $41,802
Lebanon $17,803 $18,137 $21,857 $28,739 $34,684 $37,552 $39,178
Southern Region $18,512 $19,947 $23,468 $31,132 $37,432 $38,579 $39,796
Lackawanna $16,515 $18,228 $21,983 $28,209 $35,445 $37,509 $38,854
Luzerne $16,131 $18,132 $21,700 $27,585 $34,688 $35,826 $37,093
Schuylkill* $15,946 $17,535 $21,151 $26,085 $30,559 $32,198 $33,330
Susquehanna* $15,792 $15,968 $19,564 $25,562 $29,585 $30,432 $31,529
Northern Region $16,096 $17,466 $21,100 $26,860 $32,569 $33,991 $35,201
Corridor $17,304 $18,707 $22,284 $28,996 $35,001 $36,285 $37,499
Pennsylvania $18,986 $20,249 $24,717 $31,710 $39,346 $41,307 $43,048

*Indicates counties classified as non-metropolitan area by the U.S Office of Management and Budget.
Source: Bureau of Economic Analysis. Note: Adjusted to 2012 Constant Dollars.

3.4 Industry Mix

The I-81 corridor experienced employment growth in the service sectors of the economy, as well as a trend towards job loss in the manufacturing sector. However, there are very notable differences in the industry composition and industry growth trends among parts of the corridor as illustrated in Table 7. Key findings include: 1) the corridor is undergoing economic restructuring, with loss of manufacturing jobs being compensated by more jobs in services and trade; 2) there has been employment in "Agriculture & Mining" (reflecting a generally strong farm/dairy industry); 3) the Finance/Insurance/Real Estate sector has been rapidly rising; and 4) Wholesale Trade has tapered off since 1992. These structural changes in various industries are likely a reflection of broader economic trends. As needs for transportation of these commodities rise, I-81 will become more popular for long distance trucking.

Table 7: Non-Farm Employment by Industry in the I-81 Corridor, 1969-2011
Industry Sector 1969* 1972* 1982* 1992* 2002 2009 2011
Ag. Services/Forestry/Fishing 1,518 1,435 3,074 5,379 1,567 2,045 2,009
Mining 7,809 5,539 5,047 3,179 2,587 3,085 4,283
Construction 28,765 31,245 28,569 37,786 34,463 41,437 3,9665
Manufacturing 187,269 176,855 148,386 130,167 96,837 78,580 74,971
Transportation/Public Utilities 33,660 34,393 35,849 40,241 43,107 51276 52546
Wholesale Trade 24,334 26,956 29,324 39,161 32,114 32,039 27,864
Retail Trade 92,167 95,790 107,464 133,180 102,773 100,899 99,335
Finance/Insurance/Real Estate 29,483 34,344 40,151 56,318 44,541 47,788 46,811
Services 97,748 104,499 136,978 206,274 NA NA NA
Government/Gov't Enterprises 99,095 106,443 116,136 123,080 123,731 126,213 122,779
Total Nonfarm Employment 601,848 617,499 650,978 774,765 481,720 483,362 470,263

*SIC classification; other years refer to NAICS classification
Source: Bureau of Economic Analysis

Table 7.1:Compounded Average Annual Growth Non-Farm Employment, 1969-2011
  1969-1972 1972-1982 1982-1992 1992-2002 2002-2009 2009-2011
Ag. Services/Forestry/Fishing -1.9% 7.9% 5.8% 11.6% 3.9% -0.9%
Mining 10.8% 0.9% 4.5% -2.0% 2.5% 17.8%
Construction 2.8% 0.9% 2.8% -0.9% 2.7% -2.2%
Manufacturing -1.9% 1.7% 1.3% -2.9% 2.9% -2.3%
Transportation/Public Utilities 0.7% 0.4% 1.2% 0.7% 2.5% 1.2%
Wholesale Trade 3.5% 0.8% 2.9% -2.0% 0.0% -6.7%
Retail Trade 1.3% 1.2% 2.2% -2.6% 0.3% -0.8%
Finance/Insurance/Real Estate 5.2% 1.6% 3.4% -2.3% 1.0% -1.0%
Services 2.3% 2.7% 4.2% NA NA NA
Government/Gov't Enterprises 2.4% 0.9% 0.6% 0.1% 0.3% -1.4%
Total Nonfarm Employment 0.9% 0.5% 1.8% -4.6% 0.0% -1.4%

Retail trade has also experienced a prolonged decline despite maintaining a relatively greater share of employment than the State or the nation. In 1969, one in six jobs in the I-81 corridor was in retail which has since declined down to one in nine jobs in 2009. In absolute numbers, government sector jobs have declined very slightly since 1982, but have grown as a percentage of total employment in the I-81 corridor over that time.

Table 8A: Industry Sectors As Percent of Total Nonfarm Employment: 1969-1992 (SIC)
Industry Sector 1969 1972 1982 1992
Corr. PA U.S. Corr. PA U.S. Corr. PA U.S. Corr. PA U.S.
Ag. Services/Forestry/Fishing 0.3% 0.3% 0.6% 0.2% 0.3% 0.6% 0.5% 0.5% 0.9% 0.7% 0.7% 1.0%
Mining 1.3% 0.8% 0.8% 0.9% 0.9% 0.8% 0.8% 1.0% 1.4% 0.4% 0.5% 0.7%
Construction 4.8% 4.9% 5.1% 5.1% 5.0% 5.2% 4.4% 4.4% 4.8% 4.9% 5.0% 5.0%
Manufacturing 31.1% 31.1% 23.6% 28.6% 28.1% 21.4% 22.8% 22.1% 17.4% 16.8% 16.0% 13.8%
Transportation/Public Utilities 5.6% 5.6% 5.5% 5.6% 5.7% 5.4% 5.5% 5.2% 5.1% 5.2% 4.8% 4.8%
Wholesale Trade 4.0% 4.4% 4.7% 4.4% 4.5% 4.8% 4.5% 4.7% 5.1% 5.1% 4.7% 4.9%
Retail Trade 15.3% 15.0% 15.4% 15.5% 15.6% 15.9% 16.5% 16.6% 16.3% 17.2% 17.0% 16.8%
Finance/Insurance/Real Estate 4.9% 5.6% 6.8% 5.6% 6.4% 7.4% 6.2% 6.9% 8.1% 7.3% 7.6% 7.6%
Services 16.2% 18.8% 19.2% 16.9% 19.6% 20.2% 21.0% 25.0% 24.1% 26.6% 31.2% 29.4%
Government/Gov't Enterprises 16.5% 13.4% 18.2% 17.2% 14.0% 18.1% 17.8% 13.6% 16.8% 15.9% 12.4% 15.9%

*SIC classification; other years refer to NAICS classifications Note: Breakdown after year 2000 cannot be compared due to federal changeover from SIC to NAICS definitions of industry categories
Source: Bureau of Economic Analysis

Table 8B: Industry Sectors As Percent of Total Nonfarm Employment: 2002-2011 (NAICS)
Industry Sector 2002 2009 2011
Corr. PA U.S. Corr. PA U.S. Corr. PA U.S.
Ag. Services/Forestry/Fishing 0.3% 0.5% 0.9% 0.4% 0.5% 0.9% 0.4% 0.5% 1.0%
Mining 0.5% 0.7% 0.8% 0.6% 1.0% 1.3% 0.9% 1.5% 1.6%
Construction 7.2% 10.2% 11.0% 8.6% 10.5% 10.9% 8.4% 10.3% 10.1%
Manufacturing 20.1% 21.4% 17.9% 16.3% 17.2% 14.2% 15.9% 16.9% 14.2%
Transportation/Public Utilities 8.9% 6.7% 6.1% 10.6% 7.3% 6.3% 11.2% 7.5% 6.5%
Wholesale Trade 6.7% 6.7% 6.9% 6.6% 7.0% 7.0% 5.9% 7.1% 7.1%
Retail Trade 21.3% 22.1% 20.7% 20.9% 21.9% 20.4% 21.1% 21.9% 20.5%
Finance/Insurance/Real Estate 9.2% 9.5% 8.9% 9.9% 11.2% 10.8% 10.0% 11.2% 11.0%
Services NA NA NA NA NA NA NA NA NA
Government/Gov't Enterprises 25.7% 22.2% 26.7% 26.1% 23.4% 28.1% 26.1% 23.0% 28.0%

Source: Bureau of Economic Analysis

3.5 Business Establishments

The number of business establishments along the I-81 corridor increased by 1,389 between 1998 and 2008, but has since declined, as shown in Table 9. Even with the effects of the Great Recession, business establishments increased by 1,008 in the Southern Region from 1998 to 2011, whereas the Northern Region lost 751 over that period. At the county level, all counties except Lackawanna, Luzerne, and Schuylkill gained establishments over that period.

Table 9: Business Establishments: 1998-2011
County Establishments*
1998 2008 2011
Franklin* 2,752 3,139 3,010
Cumberland 5,358 5,845 5,709
Dauphin 6,535 6,969 6,862
Lebanon 2,538 2,663 2,610
Southern Region 17,183 18,616 18,191
Lackawanna 5,393 5,530 5,325
Luzerne 7,636 7,529 7,182
Schuylkill* 3,175 2,992 2,842
Susquehanna* 787 896 891
Northern Region 16,991 16,947 16,240
Corridor 34,174 35,563 34,431
Pennsylvania 292,659 303,115 295,720

Source: Bureau of the Census, County Business Patterns.
*Indicates counties classified as non-metropolitan by the U.S Office of Management and Budget.

3.6 Property Value Changes

Median home values are a measure of property values in a particular region. Table 10 compares median values of owner-occupied non-condominium housing units in the I-81 counties and Pennsylvania from 1980 to 2009.

Throughout the 1990s, property values in both the Southern and Northern Region appreciated at rates very similar to Pennsylvania as a whole. From 2000 to 2009, values for both grew at a faster pace, albeit more slowly than the State as a whole. Growth in the Southern Region outpaced the Northern Region.

Table 10: Real Median Value of Specified Owner-Occupied Non-condominium Housing Units: 1990-2009
Location 1990 2000 2005-09 (Avg.) Compounded Average Annual Growth Rate
1990-2000 2000-2009
Franklin* $112,414 $127,192 $175,616 1.2% 3.6%
Cumberland $135,248 $156,714 $178,249 1.5% 1.4%
Dauphin $113,532 $129,923 $153,598 1.4% 1.9%
Lebanon $112,573 $130,963 $157,496 1.5% 2.1%
Southern Region $118,442 $136,198 $166,240 1.4% 2.2%
Lackawanna $108,581 $121,470 $136,531 1.1% 1.3%
Luzerne $88,622 $110,285 $114,514 2.2% 0.4%
Schuylkill* $60,518 $82,324 $90,073 3.1% 1.0%
Susquehanna* $103,472 $106,383 $123,784 0.3% 1.7%
Northern Region $90,298 $105,115 $116,226 1.5% 1.1%
Pennsylvania $110,338 $126,151 $160,446 1.3% 2.7%

*Indicates county that is classified as non-metropolitan by the U.S. Office of Management and Budget.
Source data: the American Community Survey & Decennial Census (Bureau of the Census) (2012$).

One of the reasons for the steady growth in property value along the I-81 corridor may be that in recent years, I-81 has become a major route for Interstate truck transportation as a result of increased congestion along I-95. Additionally, the development of Harrisburg International Airport between 1986 and 1990 resulted in a 12% growth rate in air freight, double the national average of 6%, with a total cargo volume in 1999 of 61,472 tons. In 2011, 173,220 tons of cargo were landed at Harrisburg International[8], which represents a 9.0% annualized growth rate since 1999. These factors have spurred commercial activity in the region, and thereby an increase in the property value.

4 Economic Development Trends

This section provides an overview of development changes that have occurred (or are occurring) along I-81 Corridor, based on the insight and local data provided by interviews with state and local resource persons.

4.1 Economic Development Along the Corridor

Despite its role in connecting major manufacturing and population centers, the I-81 corridor in Pennsylvania has not developed as robustly as the peripheral areas it serves. Economic development surrounding the corridor has been concentrated in trucking, warehousing, and distribution facilities, especially south of Harrisburg. To a lesser extent, similar developments have occurred in the northern portion of the corridor. Clusters of industrial development have occurred within a narrow band adjacent to the Interstate. The region beyond has remained relatively underdeveloped and has retained a rural character, due in part to the mountainous topography of the Alleghany Mountains (especially in southern Pennsylvania).

The southern portion of the corridor (south of I-78) increased in population by 32.6% between 1972 and 2011, while the northern portion exhibited a population decline of 7.5%. Population in Pennsylvania as a whole grew by 7.0% in the same time period. Employment increased overall along the Interstate. Like population, employment growth in the southern portion of the corridor (67.4%) outpaced that of the northern portion (18.5%) between 1972 and 2011. Employment changes within the corridor region have resulted from a shift in industry composition, with a steady decline in the previously strong manufacturing base and a gradual shift toward service and transportation and trade industries.

Southern Region. I-81 has played a pivotal role in the economic growth and development of the southern part of the corridor. In Harrisburg, I-81 passes across the northern end of the city and has six lanes from the I-83 interchange on the east side to an interchange in Cumberland County. I-81 links to I-83 via Route 581, a four-lane connecter route in the county and then passes through Dauphin County.

The Harrisburg/Cumberland County area has had a spurt of growth in traffic freight since 1995. Local officials believe that the region's economy has done well because of its strategic location as the state capital, with links to Baltimore, Philadelphia, New York, and New England.

One of the major sources of continued employment and job growth, which is related to these highway connections, has been the military supply depots. Both the Cumberland Army Supply Depot and the Naval Supply Depot have been expanding in the area. In addition, Harrisburg International Airport (HIA), which is connected to I-81 and I-83 via an airport connector (PA 283) is ranked as a major air cargo facility. HIA is also headquarters to the 193rd Pennsylvania Air National Guard.

The region's two intermodal yards, the Harrisburg Intermodal Yard (Lucknow Terminal) and Rutherford Yard, have both grown in activity as transfer points where rail freight from distant locations in the Midwest and South is transferred to trucks and regional rail lines for distribution within the northeastern U.S. This has made the region one of three primary intermodal hubs within Norfolk Southern's system. The Lucknow Terminal, located in the north end of the city along Industrial Road, south of Interstate 81, is now a significant intermodal yard for traffic coming in from Pittsburgh and Chicago, and connects with rail lines going north toward Buffalo, and south towards Perryville, MD, to reach the Northeast Corridor. The Rutherford Intermodal Yard predominantly handles rail traffic heading east towards the Lehigh Valley, Philadelphia, and the New York area, and also handles traffic going southwest towards Hagerstown. In addition, US Route 11 Truck Terminals (freight truck) are located on U.S. Route 11, east of I-81 in Cumberland County. In recent years, Transportation and Warehousing industries have flourished on nearby exits and interchanges along I-81 corridor in this region.

New businesses have been starting along I-81 interchanges, moving outward from Harrisburg. Specific development activities include:

North of Harrisburg

South of Harrisburg

In the two southern-most counties along the corridor, Franklin and Cumberland, the trucking and warehousing industry accounted for 17,000 jobs and $1.69 billion in direct economic output in 2006. Which are estimated to have been created from the construction completion date of 1969 and a post-study date of 2002. Including indirect and induced economic impacts, the trucking and warehousing industries are credited with supporting 28,000 jobs and producing $2.5 billion in total economic output in 2006.[9]

Northern Region. The Scranton/Lackawanna County area has seen growth and development along Interstates 81, 84, and 380. Although the manufacturing industry has declined over the years, the trucking and warehousing industry has grown along the corridor. The I-81 stretch south of I-380 is seeing growth in truck traffic heading to New York State. A major distribution/warehouse facility is located at a growing industrial park in Taylor. That facility has substantially expanded, and now stretches over one million square feet. Growth is also seen in "recreation & amusement" industry around the Dickson city interchange near Montage Mountains, and around South Gibson Township near the Elk Mountain Ski Center.

In Susquehanna County (north of Scranton to the NY State border), the most obvious commercial and industrial development is along the I-81 corridor. Of the six interchanges that connect to I-81 within the county, new development has been concentrated on the Great Bend interchange on Exit 68 and the New Milford interchange on Exit 67. Along that area, US Route 11 between Hallstead/Great Bend and Route 706 just south of New Milford has seen a spurt of commercial activities, focused on the I-81 interchange. Also, Route 706 east of Montrose (Bridgewater Township), connected to I-81 by US Route 11, is experiencing commercial strip development.

It is difficult to isolate the highway's impact on economic development, However, the distribution, warehousing, and trucking firms that have located themselves throughout the corridor, and especially in the southern portion, have likely occurred primarily because of the development of the Interstate there and the utilization of that corridor for long-distance commercial traffic.

Local officials indicate that the trucking and distribution industry, especially in the southern portion of the Commonwealth, would not have been located in the corridor without the presence of the Interstate, and the area would have remained very rural with limited development. Along the northern portion of the route, it is likely that most, but not all, of the employment in the transportation and warehousing industries is a direct result of the access provided by the Interstate. It is estimated that the highway contributed a total of approximately 20,000 jobs in all sectors.

According to a Northern Tier Regional Planning and Development Commission representative, the lack of municipal sewage, water facilities, and other necessary utilities along I-81 corridor appears to be the factor in holding back development at the other I-81 interchanges in Susquehanna County.

4.2 Widening of I-81

In 2001, Pennsylvania Department of Transportation in conjunction with the Federal Highway Administration initiated an I-81 widening plan that focuses on widening 77 miles of I-81 to six lanes, in order to provide the needed capacity and safety along the route. The widening was performed from the Maryland line north to I-78 (route to New York City), which is located north of Harrisburg.

4.3 Non-Transportation Factors

A number of non-transportation factors have significantly influenced economic development in the I-81 corridor in Pennsylvania. Foremost among these is the continued strong growth of the markets on the East Coast which are served by the I-81 corridor.

The corridor serves as an alternative route to I-95 and the major metropolitan centers along the Atlantic coast. Due to the increasingly congested conditions on I-95 and the limited developable land surrounding that corridor in places such as New York City, Philadelphia, Baltimore, and Washington, the future of I-81 seems promising with new opportunities. Exorbitant land values, relatively higher labor costs, and local taxes in the major metropolitan areas have pushed some logistics operations into periphery areas, including areas along I-81.

There is no coordinated effort to develop a cohesive economic development plan for the corridor. In Pennsylvania, economic development planning is conducted at the municipal level. A multistate I-81 Corridor Coalition was developed with an eye towards enhancing economic growth in the corridor. The Coalition state members include Maryland, New York, Pennsylvania, Tennessee, Virginia, and West Virginia. Their mission is to improve freight and passenger movement through the corridor.

4.4 Retail Sales

Retail sales are concentrated primarily in motor vehicles and parts (19-27%) and other sales (19-48%) as listed in Table 11. The highest level of sales occurred in Luzerne and Dauphin counties. Buyers in both each spent over $10 million on retail purchases.

Table 11: Retail Sales by County, 2007

  Motor Vehicle and Parts Dealers Bldg. Material, &Garden Equip., & Supplies Food & Beverage Stores Gasoline Stations General Merchandise Stores Other Sales Total Sales
Franklin $469,928 $197,106 $213,140 $250,389 $271,161 $348,247 $1,749,971
Cumberland $950,339 $309,679 $571,493 $531,976 NA $1,321,425 $3,684,912
Dauphin $702,124 $256,048 $546,853 $502,701 NA $1,861,789 $3,869,515
Lebanon $375,393 $189,741 $211,940 $192,945 $234,023 $284,599 $1,488,641
Southern Region $2,497,784 $952,574 $1,543,426 $1,478,011 $505,184 $3,816,060 $10,793,039
Lackawanna $737,179 $281,131 $544,077 $319,577 NA $1,296,857 $3,178,821
Luzerne $1,093,681 $405,021 $595,082 $652,457 $615,426 $1,862,080 $5,223,747
Schuylkill $252,075 $121,672 $250,084 $185,150 $196,883 $312,032 $1,317,896
Susquehanna $84,441 $24,184 $53,679 $148,110 $9,987 $83,192 $403,593
Northern Region $2,167,376 $832,008 $1,442,922 $1,305,294 $822,296 $3,554,161 $10,124,057
Pennsylvania $35,136,362 $12,170,621 $25,375,827 $18,156,780 $20,423,111 $55,580,077 $166,842,778

Source: U.S. Census Bureau, 2007 Economic Census
(2007$)

5 SUMMARY

I-81 has developed from a regional connector to part of a major route for interstate truck transportation seeking an alternative to I-95. This has supported economic growth for both the Harrisburg and Scranton regions, particularly in transportation & warehousing, and certain technology-based manufacturing industries. In the 1960s, I-81 was built for a maximum capacity of 30,000 vehicles per day with 15% trucks. Currently, I-81 in Pennsylvania is used by 36,000 to 79,000 vehicles per day with 30% trucks.


[1] 2012 State of Agriculture - Franklin County

[2] Bureau of Economic Analysis, Regional Economic Accounts, 2011

[3] ibid

[4] ibid

[5] ibid

[6] ibid

[7] ibid

[8] FAA, 2013. All-Cargo Data for U.S. Airports for Calendar Year 2011.

[9] EDRGroup SHRP C03 Project case research and interviews.

Updated: 08/06/2013
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