For immediate release
Contact: Katherine Dibling, Public Affairs Specialist, (215) 574-4119
The Federal Reserve Bank of Philadelphia’s Community Development Studies and Education Department today released the results of the First Quarter 2012 Community Outlook Survey (COS), which monitors economic factors affecting low- and moderate-income (LMI) households in the region.
The survey asked the 63 participants, whose organizations provide services to LMI households, to evaluate how their clients’ financial conditions had changed from the fourth quarter of 2011 to the first quarter of 2012. The survey also solicited respondents’ expectations about these factors for the second quarter of 2012.
“Survey respondents continue to see deterioration in the overall circumstances of LMI households and, at the same time, see a far more troubling decline in their own organizations’ capacities to meet their clients’ needs.”
Daniel Hochberg, Senior Research Assistant, Community Development Studies and Education, Federal Reserve Bank of Philadelphia
Twenty-three percent of respondents reported an increase in the availability of jobs, while 17 percent noted a decrease. Forty-four percent of respondents expect additional jobs to become available to LMI individuals in the second quarter of 2012, compared with 15 percent who predict a decrease in jobs.
While it appears that the prospects for employment may be improving for LMI households, the availability of affordable housing, financial well-being, and access to credit for those households continued to deteriorate in the first quarter of 2012.
Twenty-four percent of service providers reported a decrease in the availability of affordable housing in the first quarter, and five percent reported an increase. Nine percent expect the availability of housing to increase in the second quarter.
Ninety-one percent of participants reported that they saw no change or a decrease in the financial well-being of LMI households in the first quarter. Seventeen percent expect to see an improvement in the second quarter. Ninety-six percent of the respondents reported that access to credit had decreased or stayed the same. Seventeen percent expect to see improvement in the second quarter.
Most service providers (76 percent) saw demand for their services increase from the fourth quarter of 2011, and 20 percent indicated that demand has remained the same. Sixty-nine percent expect demand to continue to increase in the second quarter, and 29 percent expect demand to stay the same.
Fifteen percent reported an increase in their capacity to meet their clients’ needs; 85 percent reported a decrease or no change in capacity since the fourth quarter. Twenty-three percent also expect to see an increase in capacity in the second quarter, and 76 percent expect a decrease or no change.
Two percent indicated that funding had increased; 98 percent reported that funding had decreased or stayed the same in the first quarter. Thirteen percent of the respondents expect to see an increase in their funding in the second quarter, while 45 percent expect it to decrease. Forty-three percent expect no change.
In the first quarter of 2012, we asked respondents to share a recent challenge that their organization had encountered in providing services to LMI households and to identify the steps that were taken to resolve it. Most respondents cited budget cuts as the principal obstacle threatening their organizations’ effectiveness. Respondents explained that additional cuts to their organizations’ already constricted budgets have forced them to shut down some existing programs, cut staff, decrease the number of clients admitted to their programs, and reduce the scope of services provided to their clients. In order to counteract the effects of these funding cuts, many organizations have begun to seek out alternative funding sources, rely more on volunteers, and shift their business model from being dependent on government funding to relying more on private giving.
The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank and savings and loan holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.