How These Five Trends Shaped Lehigh Valley’s Economic Landscape in 2020
By Nicole Radzievich Mertz on January 4, 2021
Research and data analyzed by the Lehigh Valley Economic Development Corporation indicate that in 2020 the Lehigh Valley economic landscape transformed at a pace not seen in many years.
In the first month after COVID was declared a pandemic, employment dropped more sharply than during the entire Great Recession of 2007 to 2010, but some companies quickly retooled operations so work could continue and community needs could be met during the global health crisis.
The recovery is underway, but it has been unpredictable and not equal among occupations, industries or regions. Some industries are still struggling, but others are finding opportunities for innovation.
Here is a rundown of how those trends shaped Lehigh Valley in 2020:
In response to the pandemic, employers expanded their technological infrastructure, allowing engineers, software developers and other office-based employees to work safely from home. But many employees, like cashiers and forklift operators, cannot perform their jobs remotely.
We learned in 2020 that these “non-remote” jobs account for a large part of Lehigh Valley’s workforce by several measures.
Chmura Economics’ JobsEQ, an economic and labor market analytics program used by LVEDC, concluded that 9% of Lehigh Valley’s workforce in the second quarter could work completely from home based on their job descriptions, and another 24% could perform some of their work from home. A vast majority –67% – could not work remotely, according to JobsEQ analysis.
Apartmentlist.com, a leading source of U.S. rental information, reported that 38% of Lehigh Valley’s workforce had jobs deemed essential in the pandemic economy and that could not be done from home, putting the Valley in the top 10 metropolitan regions in the country with that high of a percentage.
Lehigh Valley had a record GDP of $43.3 billion in 2019 before COVID sent an otherwise robust economy into a recession. The region has since gained back about 70% of the jobs lost in April, according to the latest data on non-farm payroll jobs published by the U.S. Bureau of Labor Statistics.
Jobs in some industries, like hospitality, are still reeling because of social distancing mandates while jobs in hospitals, critical in the public health crisis, have bounced back.
Younger workers have been hit harder by the slowdown. The LVEDC’s analysis of state data shows that those under 35 made up 40% of continuing claims for unemployment insurance in Lehigh Valley as of the week ending Dec. 12. Women also are disproportionately affected, comprising 57.6% of the claims during that same time period.
Opportunity Insights, an economic tracker developed by researchers based at Harvard, reported that employment among high-wage workers has recovered, but that’s not true among low-wage workers. As of Oct. 15, employment among workers making more than $60,000 was 8.1% higher than January in Lehigh County and 2.1% higher in Northampton County. Among those making less than $27,000, employment was 9.5% lower in Lehigh and 17.2% lower in Northampton.
In-store sales soured during COVID, and many consumers began shopping online. As e-commerce soared, so did the distribution sector, which choreographed the delivery of purchases. Lehigh Valley, based on its strategic location in the heart of the Northeast market, serves as a critical link in that supply chain.
Heavyweights including Amazon and FedEx are among the companies occupying 108.9 million square feet of logistics space in the metropolitan region, which includes Lehigh, Northampton, Carbon and Warren counties. Another 7.2 million square feet of logistics space was under construction by year’s end.
While initially hit by the pandemic, employment in the transportation and distribution sector bounced back. It averaged 32,279 in Lehigh and Northampton counties by the second quarter of 2020 – about 6% more than the second quarter in 2019, according to the Quarterly Census of Employment and Wages.
New job postings for typical logistics occupations exceed the postings from last year, offering workers with limited education and experience jobs that pay $15-an-hour or more amid a recession.
From FedEx’s expansion to SunCup Juice’s new production facility, companies continued to increase their industrial footprints in Lehigh Valley in 2020 as they positioned themselves for the post-pandemic economy.
It’s part of Lehigh Valley’s longer economic story: developers have completed 18 industrial buildings larger than 500,000 square feet in the last five years and added 5,000 manufacturing jobs between 2015-19. As of the fourth quarter, there were 122 million square feet of industrial space in Lehigh and Northampton counties, according to CoStar, a leading provider of commercial real estate information and analytics.
Lehigh Valley ranked in the Top 5 markets for industrial space under construction as a percentage of total industrial space (about 6%) in the third quarter of 2020. It is the only Northeast market to make the Top 20, according to CoStar.
OraSure Technologies in Bethlehem made national news for its work on a COVID test. U.S. Specialty Formations in Allentown is working with VaxForm on a COVID vaccine. And Eight Oaks and Social Still used their craft distilleries to make hand-sanitizer in the early days of the pandemic.
Those are just a trio of recent examples of the homegrown innovation. Buoyed by a strong network of universities and incubators, Lehigh Valley is a hotspot where innovators can turn their ideas into businesses.
The region got high marks for entrepreneurship from the Brookings Institution, a Washington, D.C., think tank which measured job changes at young companies. Between 2017-18, Brookings ranked Lehigh Valley better than all but five of the 56 regions with a population between 500,000 and 1 million people.
Other data suggest more entrepreneurs are in the pipeline. From 2017-2019, business applications for employer identification numbers have topped 5,000 annually. Applications are needed to hire employees and pay federal taxes. While not every application becomes a new business, the statistic provides some insight into entrepreneurial activity in a region.
Made Possible in Lehigh Valley’s Top 10 Most-Read Stories of 2020
Over the past 12 months, Made Possible in Lehigh Valley has been hard at work telling stories of the people, companies, and organizations from the region and highlighting [...]Continue to Next Page