Lehigh Valley Sees Tremendous Growth in Leisure and Hospitality Sector
By Colin McEvoy on February 3, 2015
The leisure and hospitality sector of the Lehigh Valley has seen tremendous growth in the past year, making up 41.9 percent of the region’s new jobs in December 2014 when compared to the same month the previous year.
The Lehigh Valley had 33,500 leisure and hospitality jobs in December 2014, according to an analysis by the Lehigh Valley Economic Development Corporation (LVEDC). That’s a 2,600 increase over the 30,900 jobs in that industry in December 2013, representing an 8.41 percent year-to-year jump.
In a comparison of 20 metropolitan areas where leisure and hospitality make up a major portion of the economy, the Lehigh Valley’s 8.41 percent jump was the highest year-over-year increase. Others included Orlando (6.98 percent), Savannah (5.31 percent), San Francisco (4.67 percent), Atlanta (3.57 percent), Los Angeles (2.69 percent), Las Vegas (0.94 percent), New Orleans (a 1.24 percent drop) and Atlantic City (an 18.26 percent drop).
A large portion of the Lehigh Valley’s new leisure and hospitality jobs came from the upsurge of development in downtown Allentown as a result of the Neighborhood Improvement Zone (NIZ) tax district, with hundreds of new jobs coming online in 2014 at the PPL Center hockey arena, the Renaissance Allentown Hotel and neighboring restaurants and businesses.
“The NIZ has not only been a catalyst for growth in downtown Allentown, but is also having a reverberating effect across the entire Lehigh Valley,” said Don Cunningham, LVEDC president and CEO. “Regions are judged by the strength and vitality of its core central cities, and as Allentown flourishes, so too with the Lehigh Valley.”
Global Spectrum, the company that manages the PPL Center, hired about 300 new workers in 2014, and Ovations Food Services, which handles food services at the hockey arena, hired about 200, according to Nancy Dischinat, executive director of the Lehigh Valley Workforce Investment Board. The Renaissance Marriott Hotel created another 140 jobs.
Additional jobs were created by the restaurants and other tourism-related businesses opening in and around these projects. For example, there’s The Dime, an upscale restaurant located within the Renaissance hotel, and the Hamilton Kitchen & Bar, which opened directly across from the PPL Center entrance, creating another 60 jobs, according to Dischinat.
“Last year at this time, our unemployment rate was 7.3 percent,” Dischinat said. “Now it is 5.2 percent. Jobs in Allentown made a difference!”
Additional economic growth
In total, the Lehigh Valley had 351,400 nonfarm jobs in December 2014, according to John Lamirand, LVEDC research specialist. That’s an increase of 4,400, or 1.27 percent, compared to the 347,000 figure in December 2013.
Besides leisure and hospitality, the largest year-to-year increase in Lehigh Valley jobs came in the area of professional and business services, which jumped from 46,900 to 48,300, an increase of 1,400 jobs. Jobs in this category include legal services, accounting, engineering, computer system design, technical consulting services, advertising, employment services and cell centers, among others.
Other industries that showed growth from December 2013 to December 2014 include transportation and warehousing, which increased by 1,200 jobs (19,000 to 20,200); manufacturing, which increased by 800 jobs (34,500 to 35,300); and wholesale trade, which increased by 200 jobs (13,400 to 13,600).
But the Lehigh Valley also saw a drop in two industries. The region had 70,100 jobs in education and health services in December 2014, a drop of 1,000 from December 2013, for a decrease of 1.41 percent. Likewise, local government jobs fell from 35,800 to 34,900, a 2.51 percent drop.
This analysis uses Current Employment Statistics data from the U.S. Bureau of Labor Statistics. December data is considered preliminary. This data does not indicate specifically which employers have added or reduced jobs because it is based on a random sample of worksites, clustered by Unemployment Insurance account number, Lamirand said.
The significant drop in education and health services jobs could stem from teacher and staff cuts at public school districts. The Allentown School District alone cut more than 80 jobs in the 2014-15 budget, including 18 elementary school teachers, 10 middle school teachers and 29 high school teachers, according to the Morning Call. The Bethlehem Area School District cut 22 positions. Those figures do not include jobs eliminated through attrition.
Signs of strong economic health
This data from this analysis merely shows where the Lehigh Valley stood in terms of jobs in the month of December 2014 compared to December 2013, Lamirand said. It does not mean the Lehigh Valley added that total number of jobs over the course of a year because other factors occurred in the months between, including variations due to seasonal hiring.
Nevertheless, the higher year-to-year figure is a sign of strong economic health for the Lehigh Valley. The 4,400 increase of jobs in December marks a larger jump than the month-to-month comparison between November 2013 and November 2014, which reflected an increase of 2,800 jobs.
It also appears the Lehigh Valley will continue to hire at a stronger pace than most other metropolitan areas in the country.
A study released last month by the consulting firm ManpowerGroup found 25 percent of the region’s companies they interviewed plan to hire more employees in the first quarter of 2015, while 66 percent say they will maintain current workforce levels and only eight percent say they will reduce staff. That tied Lehigh Valley for the 11th-highest Net Employment Outlook out of 100 major metropolitan statistical areas surveyed by the firm.
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