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Don Cunningham: Lehigh Valley’s Industrial Boom Should Not Go Unnoticed

By Colin McEvoy on August 29, 2016

This column, written by LVEDC President and CEO Don Cunningham, originally appeared in Lehigh Valley Business on August 29, 2016. (Click here to read Cunningham’s previous columns.)

Don Cunningham

Don Cunningham

There were times back when my kids were young that a relative we didn’t often see would remark that one of the kids was really getting tall.

I remember thinking I didn’t notice that.

Today, it happens when some old high school or college buddy is kind enough to say, “Wow, your hair is really getting grey.”  Thanks, pal.

Familiarity is famously said to breed contempt, but more accurately familiarity causes us to lose perspective. What we see every day, with its incremental change, seems uneventful until it’s noticed as uncommon or put into a larger perspective.

Last week I had lunch with a national developer friend who travels the United States and does projects here, among other places. He said, “I don’t know if the people of the Lehigh Valley realize that the Lehigh Valley is one of the fastest growing industrial markets in the entire United States. It’s growing faster than the inland empires in Texas and California, and is the most desirable market in the Northeast.”

The day of the lunch happened to be the same day that the Lehigh Valley Economic Development Corporation released its quarterly real estate market report. The message is clear.

Since 2014, about 10 million square feet of industrial space has been added in Lehigh and Northampton counties. Today, there is another 5 million square feet under construction. While the Lehigh Valley is only about one-tenth of the size of the inland industrial empires in Texas and California, the rate of growth here is outpacing both of those regions.

The region’s gross domestic product has surpassed $35 billion, ranking 75th out of the 381 largest metropolitan statistical areas in the United States.

“Demand for high-quality industrial space in the Lehigh Valley continues to grow and we see the supply of new product struggling to keep pace,” said Justin Fanslau, director of leasing at Liberty Property Trust. “Users of all size recognize the strong fundamentals of this market and as a result they want to operate here.”

Just this summer, several major deals have been announced or broken ground for construction, including what will be FedEx Ground’s largest facility in the United States, Amazon’s addition of another 1.1 million square feet in Northampton County, and online retailer Stitch Fix’s nearly 500,000 square foot facility in Lower Nazareth.

Job creation has exploded in the logistics, e-commerce and transportation sectors. Total employment will soon exceed 30,000 jobs in that area; five years ago it was below 20,000. And while a familiar complaint is that the jobs are not high paying, that is a bit misleading. Pay is growing. Average wages in the sector are now in the $15 to $16 per hour range, primarily due to increased demand for workers. Supervisors and managers are higher.

Job creation per facility is also growing. FedEx expects to hire more than 600 employees, as does Amazon. Online retailer Zulily, located in south Bethlehem, will ultimately employ more than 1,000 people.

Wages for workers with low skill sets, meaning no higher education degree or vocational and technical certificate or training, are often lower in other sectors, such as retail, food service, and more menial positions in health care or building maintenance and landscaping.

For the 38 percent of the workforce in the Lehigh Valley with only a high school diploma or less and no vocational or technical trade, opportunity now abounds for employment. This is great for the region. The lack of jobs for workers with that skill level would create a huge challenge.

We are fortunate to be experiencing this industrial growth in the Lehigh Valley even if sometimes it’s hard to notice it or understand it.  We are getting “taller” in the Lehigh Valley.

Now is Great Time for Lehigh Valley Companies to Obtain Capital

This article, which is based on an interview with LVEDC Vice President of Finance John Kingsley, originally appeared in Lehigh Valley Business on August 29, 2016. Click [...]

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Lehigh ValleyQuick Facts

  • Industry Spotlight

    13.8% of Labor Force
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  • By the Numbers
    $39.1 Billion

    Gross Domestic Product
    2016

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  • Industry Spotlight

    9.8% of Labor Force
    Employed in Manufacturing
    Q4 2016

  • By the Numbers
    $3.44 Billion

    Exports
    2015

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    1,504 Total Office Buildings
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    $57,510

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    24,400

    New Jobs Created Over Past 5 Years

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    658,477

    Population

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    342,493

    Labor Force

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    17.2% of Labor Force
    Employed in Health Care & Social Assistance

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    5,073

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  • By the Numbers
    25.8 Million

    Total Office Inventory (Square Feet)
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    10.1% Industrial rent growth
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    115.5 Million

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