Lehigh Valley GDP Grows to $35.4B, Continues Pattern of Growth
By Colin McEvoy on September 29, 2015
The Lehigh Valley’s GDP has risen to $35.4 billion, a roughly $1.1 billion-increase from the gross domestic product announced earlier this year, not only showing strong overall growth, but also growth in every measurable subcategory.
The regional economy for 2014 ranks 75th out of the 381 largest metropolitan statistical areas in the United States, according to an analysis by the Lehigh Valley Economic Development Corporation (LVEDC).
Having shown consistent growth nearly every year for more than a decade, the Lehigh Valley’s GDP is larger than that of the entire state of Vermont ($30.7 billion) and of 94 other countries in the world.
“Since the national recession ended, the Lehigh Valley has been on an unprecedented burst of growth,” said Don Cunningham, LVEDC president and CEO. “No other metropolitan area of Pennsylvania has grown at the rate of the Lehigh Valley.”
From 2013 to 2014, the Lehigh Valley saw a 3.12 percent growth in GDP. Out of 19 major regions in Pennsylvania, only two others saw a larger year-to-year GDP increase (Centre and Lycoming counties, both with 3.87 percent), and both are rural counties falling within the Marcellus Shale foundation.
The regional GDP grew in every category from 2013 to 2014, including:
- Manufacturing (4.1%)
- Transportation and warehousing (4.7%)
- Finance, insurance, and real estate (6.2%)
- Professional and business services (6.6%)
- Health care, educational services, and social assistance (2.6%)
- Arts, entertainment, accommodation, and food services (0.6%)
The growth in the manufacturing subsector is particularly notable because the Lehigh Valley’s GDP in that category had trended downward in previous years, including a nearly 5 percent drop from 2012 to 2013. That trend appears to have reversed, and the Lehigh Valley’s manufacturing GDP now ranks 64th out of 351 major U.S. metros tracking that subcategory.
“I think the most significant indicator in these numbers is the return of manufacturing growth in the Lehigh Valley,” Cunningham said. “When you look at economic output instead of just jobs you see that manufacturing is a growth sector and the Lehigh Valley outpaces the rest of Pennsylvania and much of the country in manufacturing growth.”
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.
The regional economy has grown each year of the past decade except in 2009, during the height of the Great Recession. The Lehigh Valley GDP for 2014 is 5.7 percent higher than it was in 2010, and 10.69 percent higher than in 2003, according to the LVEDC analysis.
Within the United States, regions with similar GDPs include Charleston, S.C. ($34.4 billion), Harrisburg ($32.21 billion), and Wichita, Kan. ($30.27 billion). Outside the U.S., the Lehigh Valley’s GDP is larger than that of such nations as Bolivia ($35 billion) and Paraguay ($30.8) billion.
Previous studies have shown that the Lehigh Valley weathered the Great Recession unusually well. A study released earlier this year by LVEDC no other major region in Pennsylvania has experienced greater post-recession job growth than the Lehigh Valley.
These GDP figures derive from the U.S. Department of Commerce’s Bureau of Economic Analysis and were analyzed and presented by John Lamirand, LVEDC’s research specialist. GDP rankings of other states and countries come from the IMF World Economic Outlook and were last updated in April 2015.
The $35.4 billion figure is the Lehigh Valley’s “nominal GDP,” which is the total economic output based on current price levels and currency values. The figures measuring the region’s GDP from 2004 to 2014, and measuring growth in GDP subcategories from 2013 to 2014, refer to its “real GDP,” which takes inflation into account to give a more accurate perspective over time.
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This column, written by LVEDC President and CEO Don Cunningham, originally appeared in Lehigh Valley Business on September 21, 2015. (Click here to read Cunningham’s previous [...]Continue to Next Page