Tracking the Trajectory of Growth in the Lehigh Valley Economy
By Colin McEvoy on August 21, 2017
This column, written by LVEDC President and CEO Don Cunningham, originally appeared in Lehigh Valley Business on August 21, 2017, as part of their special issue on the Top 100 privately-held companies in the Lehigh Valley. (Click here to read Cunningham’s previous columns.)
I can still see the marks inside the closet door at my great-grandmothers house.
They were growth marks. Lines scratched in pencil, marking our height. We each got measured once a year. Next to the pencil mark she wrote our name and the date.
The trajectory of my growth – and that of all my cousins – was mapped on the door jam of a ranch house on 7th Avenue on the West Side of Bethlehem.
A decade after my great-grandmother died, the then-owners told me the marks were still there. They knew the house had long been in my family, and couldn’t bear to remove the fading marks. And since there were dozens of great grandkids, there was a lot of graphite scratchings on that door jam.
I very much doubt they remain today. It was a long time ago. But, the importance of taking stock of our annual size and marking it down is not likely to go away. As adults, we may stop measuring our height but not our growth.
In this annual issue, Lehigh Valley Business takes a look at the size of the region’s 100 largest private companies in both revenue and number of employees. As my great grandmother did for our family, LVB is providing us a service.
A region can’t plan for tomorrow if it doesn’t understand where it was yesterday and is today. One glance at this year’s Top 100 list, confirms what we know is the strength of the Lehigh Valley economy: it’s balanced.
Long gone are the days when most of our economic eggs were held in one big basket of heavy industry. Today, the Lehigh Valley’s top four economic sectors are all within a few hundred million dollars of each other. The region’s total GDP is $37 billion with the four largest sectors breaking down like this: 1) Manufacturing, $5.6 billion 2) Finance and Real Estate, $5.5 billion 3) Education and Health Care, $5 billion, and 4) Professional and Business Services, $4.9 billion.
Like a solid table, the Lehigh Valley economy is balanced on these four sturdy legs. The top 100 largest private company list this year reflects that balance. Most notable is that manufacturing is the Lehigh Valley’s largest economic sector with six manufacturers in the top 10, including both number one and number two, East Penn Manufacturing and B. Braun Medical. Victaulic is number four.
It’s important to understand that we still make things here in the Lehigh Valley and Berks County. While automation and technology limits the number of jobs in the manufacturing sector, it’s the third largest employer with nearly 32,000 workers in just Lehigh and Northampton counties. With the addition of Berks County, and especially East Penn Manufacturing, the number surpasses 40,000 workers.
Health care is the largest employer with more than 55,000 employees. Coordinated Health and its 1,300 employees ranks in the top ten of this year’s list of private employers. The professional and business services sector also has two employers in the top ten, Ciocca Dealerships and the Bennett Automotive Group.
Interestingly, the warehouse and distribution sector, which has garnered so much attention and interest in recent years, is only the sixth largest sector in GDP with $1.7 billion, and employs far fewer people than manufacturing with 24,678 workers. It has been, however, in recent years the fastest growing sector in job creation
The retail sector, which is challenged by the advent of e-commerce and straight to consumer purchasing, retains a lead over warehouse and distribution in both economic size and employees, ranking fifth in GDP with $2.3 billion and second in jobs with 34,256 workers.
Lehigh Valley and Berks remain the rare markets in the United States that are benefiting greatly from the new economy driven by online buying while retaining a strong retail sector. Boscov’s of Reading, with stores located in both the Lehigh Valley and Berks markets, is the third largest company in this year’s top 100 ranking.
Measuring size, and growth, is necessary and can be fun. What it’s not, however, particularly in the world of commerce is a predictor of what lies ahead tomorrow. That’s why the balance in our economy is a much better indicator than the particular size of any one company.
I can’t help but think that’s exactly what my great grandmother was thinking. She didn’t really care how tall we were any given year but there was comfort in knowing that all those marking meant there were a lot of us and, most importantly, we kept showing up every year.
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