Lehigh Valley GDP Breakdown by Sector Shows Balanced, Diverse Economy
By Colin McEvoy on April 28, 2015
The four biggest sectors that make up the Lehigh Valley’s GDP all fall within $350 million of each other, demonstrating an extraordinary balance in the region’s economy.
The category of “finance, insurance, real estate, rental and leasing” is the single biggest contributor to the Lehigh Valley’s gross domestic product, making up $4.93 billion of the region’s total $34.3 billion GDP, according to data compiled by the Lehigh Valley Economic Development Corporation (LVEDC).
But only slightly behind it are manufacturing ($4.77 billion), professional and business services ($4.71 billion) and educational services, health care and social assistance ($4.58 billion), according to the U.S. Department of Commerce’s Bureau of Economic Analysis.
This extremely close split demonstrates how diverse and multi-faceted the Lehigh Valley’s economy has become. It’s a vast difference from 20 years ago, when the region was largely dominated by one industry in traditional heavy industry and manufacturing, anchored by the Bethlehem Steel Corporation.
“We’ve seen a great balance in development in recent years, both in terms of geography across the Lehigh Valley and in different sectors of development,” said Don Cunningham, LVEDC president and CEO. “Ultimately that results in a healthier and more vibrant regional economy.”
Earlier this month, LVEDC reported that Lehigh Valley’s GDP has risen to $34.3 billion, continuing a near-constant rate of growth for the region each year over the past decade. Lehigh Valley’s GDP is larger than that of the state of Vermont and 102 other countries in the world.
In addition to the top four sectors, the next-largest contributors to the Lehigh Valley’s GDP are retail trade ($2.11 billion), information ($1.78 billion), transportation and warehousing ($1.62 billion), and “arts, entertainment, recreation, accommodation and food services” ($1.32 billion).
Out of the $4.93 billion in “finance, insurance, real estate, rental and leasing,” real estate and rental and leasing make up $3.44 billion, while the remaining $1.49 billion come from finance and insurance, according to federal data from 2013, the most recent year available.
Health care makes up about $4.01 billion alone of the $4.58 billion for “educational services, health care and social assistance,” according to the data.
Within manufacturing’s $4.77 billion GDP, $2.67 billion is “durable goods manufacturing” like wood products, metals, machinery, electronics, and motor vehicles parts. Another $2.1 billion is “nondurable goods manufacturing” like food and beverage, paper, chemical, plastics and rubber products.
The Lehigh Valley has a much more diverse manufacturing base than we once did, Cunningham said, boasting a wide array of significant manufacturers such as Lutron Electronics, B. Braun, Victaulic, Just Born and the Boston Beer Company.
Gross domestic product is the measurement of a country’s economic output. It is the total market value of all finished goods and services produced within a country’s borders in a given year. It includes all consumer, investment and government spending and exports, minus the value of imports.
About $30.9 billion of the Lehigh Valley’s GDP comes from private industries, while another $3.4 billion is from public sector or government entities, according to the Bureau of Economic Analysis.
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