Lehigh Valley in Stronger Position Than Other Older Industrial Communities, Study Says

By Colin McEvoy on June 19, 2018

Bethlehem and the Lehigh Valley are in a stronger position than most other “older industrial communities” in the United States, according to a study by the Brookings Institution.

A national study that reported on the economic assets and challenges of 70 “older industrial communities” found that the Lehigh Valley is in a stronger position than most other such communities across the country.

The Brookings Institution reviewed the economic growth patterns of what it defined as “older industrial cities,” or communities with a significant urban area with a history in manufacturing that has struggled over time to grow jobs in new sectors.

Although both Bethlehem and Allentown made that list, both are trending in a more positive direction than most of the other 68 communities in the study, and Bethlehem was one of only three communities identified as trending its way off the list altogether.

Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation (LVEDC), said that is no surprise, considering that the regional economy reached a record-high $39.1 billion gross domestic product last year, including a $6.9 billion manufacturing sector that’s continuing to grow.

“The Lehigh Valley economy has literally never been better, and that includes the days before the closure of Bethlehem Steel 20 years ago,” Cunningham said. “We’ve evolved into a diverse and multi-faceted economy that no longer depends too strongly on one single industry, and our strong position in this Brookings Institution study reflects that.”

Older industrial cities

Bethlehem and Northampton County was one of only three communities identified in the study as trending its way off the "older industrial communities" list altogether.

Bethlehem and Northampton County was one of only three communities identified in the study as trending its way off the “older industrial communities” list altogether.

The full study, which was released in April, can be found here. Although identified as Bethlehem and Allentown in the report, Brookings defines older industrial communities by a county level, so Bethlehem represents Northampton County, and Allentown represents Lehigh County.

The 70 older industrial communities in the study were areas with a population of at least 50,000, with more than 20 percent of the jobs historically in manufacturing, which have had a job growth rate lower than expected compared to the national average over a 50-year span.

An older industrial community, as defined by the study, had at least 3 percent fewer jobs in 2017 than the community’s 1970 economic structure would have predicted based on national employment trends, according to the Brookings Institution.

Although both Northampton County and Lehigh County both met that criteria, the study shows that both counties have shown much stronger job growth in recent years than the other older industrial communities, which is gradually moving them away from that designation.

Strong recent job growth

From 2000 to 2016, the 70 older industrial communities have averaged a 1.4 percent decrease in jobs. By contrast, Bethlehem and Northampton County saw a 25.3 percent increase in jobs in that time, and Allentown and Lehigh County saw a 9.4 percent increase.

Likewise, the 70 communities averaged a 13.8 percent increase in gross metropolitan product, which is the measurement of a county’s economic output. Allentown and Lehigh County saw a 25.5 percent increase, according to the report, while Bethlehem and Northampton County saw a 25.3 percent increase.

“The Lehigh Valley is on this list of older industrial communities because of the industrial history of the region,” Cunningham said, “but it’s our economic growth and job growth from the past 15 years that’s going to take us off the list.”

Emerging communities

The study specifically notes that Bethlehem and Northampton County will emerge out of the older industrial community status altogether if its economic trends persist. It was one of only three counties of which the report made this statement.

“Bethlehem, Louisville (Jefferson County, Ky.), and Trenton (Mercer County, N.J.) all anchor counties that, if current trends persist, would have relatively small competitive employment deficits a decade from now,” the report states.

Allentown and Lehigh County are not far behind. The study designated each of the 70 communities in four classifications: strong, emerging, stabilizing, and vulnerable. Strong communities ranking among top half for economic growth, and emerging counties, while demonstrating slower growth, are nevertheless “bouncing back,” according to the study.

Bethlehem/Northampton was classified as “strong,” along with such communities as Brooklyn, Philadelphia, and Pittsburgh, while Allentown/Lehigh was classified as “emerging,” along with such communities as Newark, Hartford, and Cincinnati, according to Brookings.

LVEDC Seeks to Collaborate with Each of the Lehigh Valley’s Municipalities

This article was originally featured in the April 26, 2018 issue of "Quarterly Connections," a new quarterly newsletter LVEDC is distributing to municipal officials in the[...]

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