Lehigh Valley Economic Outlook: Growth Expected to Continue into 2017
By Colin McEvoy on January 30, 2017
The Lehigh Valley GDP has never been higher, manufacturing is the region’s top economic sector, the regional industrial boom is continuing, and this past year was full of success stories in terms of new business development and the retention and expansion of existing companies.
Those were among the messages Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation (LVEDC) shared with a crowd of more 700 people at the Greater Lehigh Valley Chamber of Commerce’s 2017 Economic Outlook on Jan. 24.
“Based on what we are working with in the pipeline, I don’t expect the growth of the Lehigh Valley to wane in 2017,” Cunningham said at the annual event, which was held at SteelStacks’ ArtsQuest Center in Bethlehem.
The Lehigh Valley gross domestic product – a measurement of a country’s economic output – has reached $37 billion, the largest in regional history, and Cunningham noted that, perhaps even more importantly, that GDP is remarkably balanced.
The region’s top four sectors for economic output – manufacturing, finance/insurance/real estate, health care, and education – all fall within $650 million, meaning the Lehigh Valley is not overly dependent on any one industry or employers for economic success.
“No economy is recession proof, but our economic balance certainly is more desirable than having all of our eggs in one or two baskets, and looks much different than it did 20 years ago when a steel company still operated at the very site where you sit,” Cunningham said.
Manufacturing is now the top economic sector, making up $5.6 billion – or 15 percent – of the Lehigh Valley’s GDP. There are more than 680 manufacturers with about 36,000 employees in Lehigh and Northampton counties, and last year’s manufacturing growth was 11 percent, putting the region in the top 13 percent in the United States.
“We still make stuff here in the Lehigh Valley,” Cunningham said. “That is the theme of our recent marketing campaign. You may have seen our billboards, but more importantly, that message is being sent to site selectors, location advisors, and national commercial and industrial real estate brokers and the national media as we tell the story of the economic assets and strengths of the Lehigh Valley.”
Cunningham highlighted several of the Lehigh Valley’s major business attraction or retention projects from the past year, including Guardian Life Insurance, Mack Trucks, Amazon, Stitch Fix, Paychex, Sharp Packaging, Central Garden & Pet Company, DevTech, Ecopax, Nihon Kohden, and Norac.
One of the biggest challenges facing the region, Cunningham said, is to continue delivering a workforce with the right skills for its employers. A major effort is underway through the LVEDC Education and Talent Supply Council to help identify workforce needs and ensure the pipeline of talent flows to those high-demand jobs.
The 2017 Economic Outlook included other speakers, such as Nancy Dischinat, Executive Director of the Lehigh Valley Workforce Development Board; Jay Bryson, a global economist with Wells Fargo; and Tony Deutsch, shareholder-in-charge of tax services with Concannon Miller.
Dischinat said the Lehigh Valley has a labor force of 34,000, and an unemployment rate of 5.4 percent. The top occupations in demand currently include registered nurses, heavy and tractor-trailer truck drivers, retail salespersons, and laborers and freight, stock, and material movers.
Bryson said the tax cuts and infrastructure improvements proposed by President Donald Trump and the U.S. Congress could boost GDP growth by about 2.5 percent, but that the threat of potential trade wars with countries like China could create risks.
He also said U.S. debt held by the public could rise to 141 percent of U.S. GDP by 2046, compared to under 80 percent today, and that’s only taking current legislation into account. That does not factor infrastructure spending or tax cuts, which could increase it further, he said.
Deutsch said changes in the U.S. tax code are expected, which is common for a new president’s first year in office, and that small employers may now reimburse employees for premiums paid on individual health insurance premiums.
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