Lehigh Valley GDP Grows to Record-High $37 Billion, Manufacturing Becomes Top Sector
By Colin McEvoy on September 20, 2016
The Lehigh Valley’s gross domestic product (GDP) has risen to record levels once again, reaching a record-high of $36.97 billion, with impressive growth in manufacturing, which is now the region’s largest economic sector.
The findings were released today by the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) as part of its annual report of United States GDP and how it breaks down in the country’s 382 largest metropolitan regions. The data is for 2015.
Manufacturing jumped from the third largest output sector of the Lehigh Valley economy in 2014 to its largest sector last year, generating $5.56 billion – or 15 percent – of the Lehigh Valley’s overall GDP.
“It may no longer be your grandfather’s manufacturing in the Lehigh Valley, but it is certainly alive and well and growing,” said Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation (LVEDC). “The economic output of the Lehigh Valley continues its steady upward trajectory and we are showing our country and the world that America still makes products, and we do it well here in the Lehigh Valley, with manufacturing being the largest part of our economy.”
Strong manufacturing growth
In terms of manufacturing growth, the Lehigh Valley ranked 49th out of the 382 regions, or the top 13 percent nationally, according to the LVEDC analysis. Just over one-third (34.1 percent) of the Lehigh Valley’s year-to-year GDP growth was attributed to manufacturing. The Lehigh Valley is not the 49th largest market in the United States either by population or economic size.
With a $1.6 billion increase over the previous year, the regional GDP now ranks 73rd out of the 382 largest metropolitan statistical areas (MSA) in the United States.
“These numbers are very encouraging,” Cunningham said. “We’re outpacing the growth of most areas our size and even larger, which will continue to translate to more economic opportunities and more jobs for the Lehigh Valley.”
The Lehigh Valley’s gross domestic product grew 2.2 percent in 2015 compared to the previous year, continuing a pattern of consistent annual growth for more than a decade, according to the BEA.
Manufacturing now makes up $5.56 billion – or 15 percent – of the Lehigh Valley’s overall $36.97 GDP. That’s higher than any other subsector, followed by finance, insurance & real estate ($5.47 billion); health care & education ($4.9 billion); and professional & business services ($4.86 billion).
Continuous economic growth
“While we’ve seen an explosion of job creation in the logistics, e-commerce, and transportation sectors in recent years, it remains a much smaller part of our economic output than most people think, ranking sixth, just ahead of arts and entertainment,” Cunningham said. “This report shows that the Lehigh Valley continues to be extremely balanced and diversified, rather than entirely dependent on one single industry.”
This marks a continuing trend of growth for the Lehigh Valley economy over multiple years. The regional GDP has increased by at least $750 million each year since 2010, when it was $31.34 billion, according to the BEA.
Gross domestic product is the measurement of a country’s economic output. It is the total market value of all finished goods and services produced within a country’s borders in a given year. It includes all consumer, investment and government spending and exports, minus the value of imports.
The Lehigh Valley’s GDP is larger than that of 97 other countries in the world and the entire state of Vermont ($30.4 billion), and is only $1.65 billion behind the GDP of the state of Wyoming ($38.62 billion), according to the BEA.
The regional economy growth is about on track with real GDP growth for the United States, which is 2.4 percent in 2015, according to the BEA, compared to 2.2 percent the previous year.
Outpacing state average
The Lehigh Valley’s regional GDP growth of 2.2 percent is higher than the average among Pennsylvania metropolitan areas, which is 1.06 percent. Out of 18 MSAs in the state, the Lehigh Valley’s GDP saw the sixth-highest amount of year-over-year growth.
Out of 2.2 percent in regional GDP growth for the Lehigh Valley, 0.5 percent is attributed to durable goods manufacturing, according to BLS, while another 0.25 percent comes from the manufacturing of nondurable goods, including food or any products only for a short period of time.
These GDP figures derive from the BEA and were analyzed and presented by John Lamirand, LVEDC’s research specialist. GDP rankings of other countries come from the IMF World Economic Outlook.
The $36.97 billion figure is the Lehigh Valley’s “nominal GDP,” which is the total economic output based on current price levels and currency values. The figures measuring the region’s GDP from 2005 to 2015, and measuring growth in GDP subcategories from 2014 to 2015, refer to its “real GDP,” which takes inflation into account to give a more accurate perspective over time.
2015 is the most recent year for which measurable GDP data is available, according to the BEA.
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