Lehigh Valley Business Real Estate Symposium Highlights Economic Outlook, Trends
By Colin McEvoy on March 8, 2019
More than 450 people from the regional business community and real estate and construction industries were in attendance at this year’s Lehigh Valley Business Real Estate & Development Symposium, held on March 6 at DeSales University in Upper Saucon Township.
The Lehigh Valley Economic Development Corporation was a major sponsor for the event and hosted a table in the networking area, and LVEDC President & CEO Don Cunningham was among the expert speakers during the program.
Top 5 in the Nation
Cunningham discussed the recent announcement that the Lehigh Valley was named one of the top regions of its size for economic development in the nation last year, and the top region of its population size in the Northeast U.S. for a third consecutive year.
He also discussed the Lehigh Valley’s record-high $40.1 billion gross domestic product, noting that the regional economy is not only strong, but unusually balanced. The Lehigh Valley’s top four sectors are all very close together in terms of economic output, and that the regional economy is far more balanced and diversified than the national GDP.
“What this means is we don’t have all our eggs in one basket,” Cunningham said. “We’re much less susceptible to the rise and fall of one company or one sector. It’s a sign of a well-balanced, healthy economy.”
Contrary to misconceptions that e-commerce makes up a disproportionate amount regional economic growth, Cunningham noted that 58 percent of LVEDC’s prospect activity in the past 18 months have been from production and manufacturing companies, with only 28 percent from distribution.
“We have almost 2,000 industrial buildings in the Lehigh Valley, and only about 5 percent are 300,000 square-feet or more,” Cunningham said. “Sometimes people see these buildings and assume they are warehouses, but that’s not always the case. Manufacturing takes place in box-shaped buildings in the suburbs; it doesn’t look like Bethlehem Steel from the outside anymore.”
Cunningham also listed several major Lehigh Valley economic development projects from the past year, including ADP’s newly-announced office in Allentown’s Five City Center, Air Liquide 270-job expansion in the Slate Belt, B. Braun’s plans to add 250 jobs, and Freshpet’s major renovation and expansion,
James King, Chief Investment Officer at BB&T Institutional Investment Advisers and Senior Vice President at BB&T Retirement and Institutional Services, delivered the event’s keynote speech, discussing his economic forecast.
King said the date of the symposium marked the anniversary of the lowest point the stock market reached after the Great Recession. Since that time, the nation has experienced 11 months of an expanding economy, marking the second-longest U.S. economic expansion since 1854, surpassed only by the 120 months of growth from March 1991 to March 2001.
King said he believed the current expansion would continue because the normal signs of an “aging” economic cycle have so far not been present. Inflation and interest rates remain low, he said, and the Federal Reserve’s long run projections are more moderate than in past cycles.
“We’re not in risk of the things that usually kill these economic expansions,” King said. “While it’s always difficult to see past 18 months, I don’t see a recession in sight.”
Warning about “headwinds”
Additionally, consumer spending remains positive, with optimism high due to unemployment near a 50-year low, King said.
However, King cautioned about some economic “headwinds,” citing uncertainty during that hit fourth quarter markets due to such political issues as North Korea, China and tariffs, the U.S. government shutdown, and global trade disputes.
He also noted that while gross domestic product growth remains strong nationally, overall global economies are seeing decelerating growth.
The event also included two panel discussions. One highlighted future growth and development in the Lehigh Valley and Cunningham as a panelist, along with Lehigh Valley Planning Commission Executive Director Becky Bradley, and Joseph A. Fitzpatrick, Jr. and Colin Keefe, both of Fitzpatrick Lentz & Bubba.
The other panel discussion featured Cindy McDonnell Feinberg, Principal with Feinberg Real Estate Advisors, and Christopher Read, Associate Broker and Realtor with Harvey Z. Raad Realtors, about trends in commercial, industrial, and residential real estate markets.
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