Don Cunningham: Whistling Through the Graveyard to Record Growth

By Colin McEvoy on September 26, 2018

This column, written by LVEDC President and CEO Don Cunningham, originally appeared in The Morning Call and on the newspaper’s website on September 26, 2018. (Click here to read Cunningham’s previous columns.)

Don Cunningham

Don Cunningham

My 22-year-old son was home from New York City last weekend.

With fall starting to descend, I suggested we take a walk. The outside seemed safe again after a summer of Kalahari Desert temperatures, Amazon basin rainfall, and humidity levels higher than a YMCA locker room.

I was raised on window unit air conditioners, so were my kids. Today, however, I have central air. Life is different now.

Eager to breathe non-conditioned air and to snap an unhealthy, summer-long, A.C.-fueled, Netflix binge-watching bender, it was time to step out, father and son.

“You pick where we walk,” I said, being a generous father.

“How about the old cemetery downtown where we’d go when I was a kid?”

Wait, what?

He meant Nisky Hill Cemetery in downtown Bethlehem, which looks out over the Lehigh River and across to the old Bethlehem Steel plant in south Bethlehem.

Dad jackpot!

As a lover of history, I have a fondness for cemeteries, particularly old ones. There’s much to be learned from reading headstones.

Cemetery walks are an odd proclivity of mine, well known within my family – and typically avoided by other members. Asking me to go is without precedent.

I figured the kid really needed money – or something worse.

“I want to see that memorial grave of the guy who built Bethlehem Steel,” he said.  “I was thinking of it recently.”

He meant Eugene Grace, Bethlehem Steel’s second president, who succeeded Charles Schwab. Grace led the company during two world wars and the boom years of the 1950s. He died in 1960. His mansion in west Bethlehem was large enough to become a nursing home, Holy Family Manor.

In Nisky Hill cemetery, Grace built for himself and his family a grave that is more a monument, complete with marble benches for visitors. The grave sits on a bluff that looks across the Lehigh River at the plant’s blast furnaces and the headquarter building where Grace reigned.

It’s an amazing vista, one of the most extraordinary in the Lehigh Valley. Grace lies to the north encased in marble, the steel skeletons of America’s second largest steelmaker across the river to the south.

It’s a view a kid remembers a decade later. A cemetery icon that teaches history.

Not only the history of his city and region but the United States – and his family. His grandfather and great-grandfather worked in those mills.

Brendan designs lighting products for Ralph Lauren’s home décor division. That requires living in New York today. But, the economy of the Lehigh Valley has changed. It’s growing – rapidly – and diversifying. New jobs and industries are finding their way here.

Earlier this month, the U.S. Department of Commerce released its annual breakdown of Gross Domestic Product, or GDP, in the United States. GDP is the official measure of all goods and services produced. It’s broken down by the regions and industries where it’s generated.

The Lehigh Valley’s private sector GDP reached a record high of $40.1 billion last year, making it the 64th largest economy in the United States. There is more economic output in the Lehigh Valley than in the entire states of Vermont and Wyoming. If the Lehigh Valley were a country it would have the 88th largest economy in the world.

Eugene Grace never saw these numbers in his day.

Bethlehem Steel made armaments that helped to win two world wars and the steel to build the skylines and bridges of America, but today’s Lehigh Valley economy is much larger – and much more diverse. We no longer have all our eggs in one basket.

The largest sector of the Lehigh Valley economy today is finance, insurance and real estate, which produced $7.6 billion in output last year. Regional corporate headquarters like Guardian in Hanover Township, which employs 1,600 people, and regional bank offices like BB&T in Allentown – whose skyline is filling with the offices of finance and information companies – are creating new professional jobs. In addition, the growth of the region is driving commercial and industrial real estate rents and sales.

The real national story of the Lehigh Valley, however, is its transition and growth in manufacturing, which remains the second largest part of the region’s economy.

Manufacturing grew by more than 10 percent last year, driving 36 percent of the total growth of the Lehigh Valley economy. It makes up 18.4 percent of the region’s overall economy, making the Lehigh Valley unique in America. Manufacturing today is 11.6 percent of the U.S. economy.

This is a legacy of the type of workforce and training that remains here.

Last year, Lehigh Valley manufacturing generated $7.4 billion in economic output, just $200 million short of its largest sector. It’s a new kind of manufacturing that requires a lot more skills and training. It ranges from medical devices and medical diagnostics to airplane parts to food, beverage and pet foods.

There are more than 650 different manufacturers, employing anywhere from 10 to 1,800 employees, that account for the region’s record output. Three high school career and technical schools, two community colleges and numerous apprenticeship and training programs produce the talent that’s driving that growth.

It’s a far cry from the often-heard wail that America no longer makes things. The Lehigh Valley certainly does.

Even more encouraging, however is the balance of today’s economy. Education and health care is the third largest sector of GDP with $5.5 billion in output. It’s also the sector with the largest workforce, employing more than 55,000 people in various skills and occupations.

In the fourth position is the catch-all category of professional services, which generated $5.2 billion in output. We can thank all the engineers, architects, lawyers and, yes, product designers. This mix of skilled jobs, often filled by young professionals and entrepreneurs, is helping to revitalize our cities, fill new apartment buildings and make the Lehigh Valley hip.

Life is different now.

Maybe someday Ralph Lauren will have his products designed here.

In the meantime, I’m still wondering if that history walk with dad was to soften me up for some money. I’ll keep you posted.

LVEDC to Host Congressional Forum on Economic Development

The Lehigh Valley Economic Development Corporation (LVEDC) will host a forum with each of the candidates running for Pennsylvania's new 7th district in the U.S. House of R[...]

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