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Don Cunningham Discusses Lehigh Valley’s ‘Record Year’ in Keynote Remarks

By Don Cunningham on March 22, 2019

LVEDC President & CEO Don Cunningham speaking at the LVEDC 2019 Annual Meeting

LVEDC President & CEO Don Cunningham speaking at the LVEDC 2019 Annual Meeting.

Below are the remarks delivered by Don Cunningham, President & CEO of the Lehigh Valley Economic Development Corporation, during the LVEDC 2019 Annual Meeting on March 19.

When I was a kid my great-grandmother lived across the street. My grandparents lived just a block and a half up 7th Avenue. In a four-block section on the avenues in West Bethlehem another half-dozen Cunningham families lived, aunts and uncles and cousins. It wasn’t until later in life that I realized this was unusual.

I was especially fortunate to know my great-grandmother. She was born in 1888 – a direct connection to a different century. She lived in an era with no automobiles, no airplanes nor electronics. No television or radio. Electric lighting was still rare in homes. Hers was a different time. Horses and trains transported people. Plumbing had yet to move indoors.

She lived until 1987, a year short of a full century. The greatest amount of technological change in human history occurred during her lifetime.

She and my great-grandfather were quite productive themselves. From four children came 16 grandchildren who produced another 36 great-grandchildren. During the ‘60s and ‘70s, not many of us strayed from the neighborhood. And, despite the astonishing number of kids, each year she’d put each of us against a closet door jam in her tiny row home and mark our height. She drew a line with a pencil and labeled it with our name and the date.

It was her way of marking progress, particularly in this small community of her own creation. The rapid pace of change during her 20th century lifetime turned her into a record-keeper. Growth and progress needed to be measured with data not just anecdote and perception. She was saber metrics before it was invented. She understood that it’s the rings of the tree that tell the real story. The changing colors of the leaves just gets all the attention.

Her closet door jams became a blur of pencil marks with names, dates and measurements. Decades later, living back across the street as an adult while raising my three children, her old house was sold when my great aunt became too old to live alone.  It went out of the family for the first time.

The new owners discovered the odd hieroglyphic-like pencil markings in the closets. They asked me if I was “Donny Jr.” Yes, I was. I learned that I was 4’ 10” back in 1977.

Today, we look back at the etchings on our door jams, not just to see how tall we are but also to understand the foundation upon which we have to build.

Our Lehigh Valley grew a lot in 2018. It was a record year in the midst of a five-year growth spurt.

The Gross Domestic Product, or GDP, generated here broke the $40 billion mark for the first time in history. The total sum of goods and services generated in our region is greater than that of two states, Vermont and Wyoming.

We are the 64th biggest economy in the United States. If the Lehigh Valley were a country we’d be the world’s 88th largest economy.  Not bad considering just 20 years ago many wrote us off as a dying, rust belt region.

Last year we cracked the top five in fastest growing regions in the United States with a population of less than 1 million people, according to Site Selection magazine.

Each year Site Selection – the official publication of the Industrial Asset Management Council – publishes its annual Governor’s Cup, ranking all 50 states and the country’s metropolitan regions on number of projects, amount of investment and jobs created.  The rankings are not subjective but based on data.

For the third straight year, the Lehigh Valley is the fastest growing region of our size in the Northeastern United States.  Only the much larger metros of New York City, Pittsburgh, Philadelphia and Boston had more projects, investment and job creation in 2018. Boston was just one ranking above the Lehigh Valley with but six more projects than are 25 major developments.

Not bad considering our region of 670,000 people in Lehigh and Northampton counties is just the third largest in Pennsylvania.  Never underestimate the underdog. We’ve come back greater than we ever declined.

The economic renaissance of the Lehigh Valley and its cities continues at a remarkable pace. What’s happening here is unique. No other region in the Northeast U.S. other than the Lehigh Valley with a population of 200,000 to 1 million people even made the Governor’s Cup national Top Ten list.

Most importantly, ours is not a story of one sector, one industry one city or one county. It’s a story of balance and diversity. Jobs are being created in offices on manufacturing floors and industrial centers.  The overall 5-year job growth rate is 5.4 percent.

Health care remains our largest employer with more than 58,000 workers.

Last year, LVEDC tracked 33 major business attraction, expansion and retention projects, resulting in the creation of 4,419 new jobs and the retention of 3,006 more. Site Selection does not disclose which 25 projects it considered eligible in its rankings.

Among some of the 2018 projects were Air Products announcing a new global headquarters in Lehigh County and competitor Air Liquide creating 290 new advanced manufacturing jobs in the Slate Belt area of Northampton County.

ADP chose the Lehigh Valley to consolidate its new regional office headquarters into new City Center office tower space in downtown Allentown for 1,450 jobs. FreshPet announced a major renovation and expansion of its manufacturing facilities for 100 or more new workers, while B. Braun announced plans to add 250 jobs with the expansion of the medical device manufacturer.

Evonik Corporation chose to remain and expand its technology and business capacities here while FedEx broke ground and has since opened its largest distribution facility in the eastern United States with the ability to move 70,000 packages per hour.

Smaller but no less significant developments of companies across a wide variety of sectors and job skills included the Gateway Building in South Bethlehem for Lehigh University and St. Luke’s offices, AblePay Health, Access Networks, Akrion, Norac, PAC Worldwide, Silbrico Corp. and Silgan Containers.

We now have a total labor force of 345,000 workers and the lowest unemployment since before the 2008 recession. The average hourly wage across all occupations is now $22.94 and the median household income hit $62,489.

Our manufacturing base continues to grow. It’s the second largest sector of our economy and the $7.4 billion of output coming from more than 680 companies makes us the 51st largest manufacturing center in the U.S.

Nearly 34,000 workers are employed in manufacturing with the amount increasing each of the last several years. Manufacturing is 18 percent of our economy. It’s only 13 percent of the economy in the U.S. All three of our major cities are revitalized and growing, along with most of our urban boroughs and suburban townships.

Allentown continues to become the region’s corporate office center with a growing downtown population and new apartments. Bethlehem has two different and unique downtowns adding offices, apartments and a mix of entrepreneurs and manufacturing. Easton continues its resurgence as the region’s newest arts and nightlife community with growing restaurants and residents.

Lehigh and Northampton are two of only 18 growing counties of 67 in Pennsylvania. Young people are coming home, staying and finding the Lehigh Valley. In the last five years, the population of 18- to 34-year-olds has grown by more than 5 percent.  We are outpacing Pennsylvania as a whole in this all-important indicator of a region’s current and future economic vitality.

Bethlehem’s millennial generation population is 31.1 percent, Easton’s is 30.5 percent and Allentown’s is 28.2 percent. All of our cities have much greater 18- to 34-year-old populations than Pennsylvania’s population of 22.4 percent.

Our colleges and universities are graduating more than 10,000 well-trained and educated students each year.  The region’s education and talent supply initiative is a pilot for Pennsylvania and has linked all the area’s colleges and schools with employers to develop pipelines and programs to align the region’s training and education to the jobs being created in the modern economy.  Last year, the world’s largest association of those who develop talent, the Association for Talent Development’s Eastern PA Chapter, recognized our effort as the best of its kind.

These are all critical indicators to support the growing trend of regional offices, life science and technology companies and creative professional offices coming to the Lehigh Valley. The Hearst Publishing, which bought many of the former Rodale magazine titles, ensuing move to downtown Easton is one example.

The Lehigh Valley is 127 percent more affordable than Manhattan, 69 percent more than Brooklyn, 43 percent more than Boston and 18 percent better than North Jersey.

The average asking rent for Class A office space in the Lehigh Valley is significantly lower than other metropolitan areas in the Northeast with an average of $18.61 per square foot. New York City is $77.63, Washington D.C. is $60.17, Northern Virginia is $36.32, Philadelphia is $32.85 and North New Jersey, $30.75.

It won’t be long until our cities and the Lehigh Valley are talked about as the next Nashville, Columbus, Pittsburgh, Hoboken or Jersey City.

My great-grandmother may be gone, along with those markings inside her closet doors, but she’d be proud of the heights the Lehigh Valley is reaching – and, most importantly, that we’re leaving no one behind as our rising tide puts a lot of new marks inside our door jams.

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