Economist: Lehigh Valley facing a ‘slowdown’.

Some major brokerage houses have been predicting another recession is looming, Lehigh Valley economist Kamran Afshar said.

Afshar disagrees, based on his latest Business Sentiment Index released Wednesday.

But he foresees that the Valley will see an economic “slowdown,” in part because the index, which measures businesses’ hiring, revenues and purchasing patterns, came in at 62.6 for the most recent quarter, down slightly from 62.9 but the third straight decline in about the last nine months.

Last October, the index climbed to 69.4 but in January, it dropped to 66.9; it fell in April to 62.9, Afshar said. A mark of 50 or less signifies a recession, according to Afshar, while a number more than that indicates a “positive” rate.

But the normally positive Afshar raised concern. “There’s no question that we are going to see slower economic growth,” he said during a presentation at DeSales University, where he operates the Afshar Data Analytics Center. “But recession? The data don’t indicate that.”

Two reasons he’s not mentioning the R-word: The 200 businesses surveyed in the most recent report indicate their spending is in an “expansion mode,” he said.

“It indicates they are trying to gear down but they haven’t yet,” Afshar said.

Additionally, employers indicated they have continued to hire. Summer intern Bailey Morgan, a sophomore at the University of Delaware and a Saucon Valley High School graduate, noted the surveyed companies added nearly 1 employee on average since the last index, led by these top three sectors: information, transportation and warehousing, and health care.

Afshar said while unemployment has held at historic lows, businesses surveyed in general could be holding back on future hiring. He said they will be “taking precautions” and “calculating for potential economic slowdown.”

Afshar also cited what’s become a chronic problem for Valley employers: finding highly skilled workers.

B.J. Metz, owner of Wilson heating and air conditioning contractor Metz Inc., who participated in the latest survey, said while his work has increased, he’s struggled to bring in well-trained technicians.

“A small company needs people who can step in immediately into the senior roles, if you will,” said Metz, who employs 11 workers. “It’s very difficult to find.”

Afshar’s survey, which he has conducted for about 20 years, covers business sentiment over the previous six months as well as the next half-year. He said he typically obtains survey responses each quarter from approximately 200-250 employers, who are members of the Greater Lehigh Valley Chamber of Commerce.

Morning Call reporter Anthony Salamone can be reached at 610-820-6694 or asalamone@mcall.com.