Lehigh Valley’s Economic Strength Explained in Six Data Points
By Nicole Radzievich Mertz on December 27, 2022
The Lehigh Valley has consistently ranked among the top 10 regions in the Northeast in terms of economic development because the eastern Pennsylvania region has the talent, location and affordability that employers need to succeed. From global leaders like Crayola to startups like Meraki Co., the Lehigh Valley boasts 15,000 businesses of various sizes and industries in a thriving market within a day’s drive of a third of the U.S. population.
Here are six key data points published in 2022 that explain just how strong the Lehigh Valley’s economy is:
The Lehigh Valley produced a Gross Domestic Product of $47 billion in 2021, a record high that came within a year of the worldwide economic collapse brought on by the COVID-19 pandemic and ensuing supply chain and labor force challenges.
The private sector economic output has recovered from the adjusted figure of $42.5 billion in 2020. After factoring in inflation, the GDP rose by 6.4% from 2020 to 2021.
The GDP of the Lehigh Valley’s top four sectors were still within about $2.5 billion of each other, indicating a balanced and vibrant economy: manufacturing ($8.4 billion), finance, insurance and real estate ($8.1 billion), Educational services, health care and social assistance ($6.9 billion), professional and business services ($5.9 billion).
The Lehigh Valley’s private economic output is the 65th largest in the nation and bigger than three states: Alaska, Vermont and Wyoming.
GDP measures the total market value of the goods and services produced in a region over a year. The GDP covers the Lehigh Valley metro region, which includes Lehigh, Northampton, Carbon and Warren counties.
Manufacturing output totaled $8.4 million in 2021, placing it as the Lehigh Valley’s top GDP contributor for the first time in 15 years.
Home to Crayola and Mack Trucks, the Lehigh Valley’s manufacturing economy is among the top 15% of the U.S. metro regions ranked in 2021. The Lehigh Valley in 2021 ranked among the top 50 markets for the production of food, medical supplies and other non-durable goods.
Underscoring the strength of the economy, manufacturing employment in the Lehigh Valley had recovered by the end of 2021, outperforming overall the recovery industry-wide.
Manufacturing made up 18% of the Lehigh Valley’s private sector output compared to 12% in the nation as a whole last year.
Lehigh Valley employers added nearly 11,000 jobs over the last five years, bringing total employment in Lehigh and Northampton counties to 330,432 by mid-2022.
That growth rate amounts to seven-tenths of a percent annually over the last five years– slightly outpacing the nation, according to data analyzed on Chmura Economics JobsEQ platform.
Manufacturing sector showed stronger employment growth at 2.4% or about eight times faster than the nation’s growth.
The population the Lehigh and Northampton counties reached 689,167 in 2021, a notable 5.8% increase over the last decade in the slower growing Northeast, according to population estimates published by the U.S. Census.
The Lehigh Valley experienced even stronger growth among young people who are of prime workforce age. The number of residents between 18-34 has grown by 9% from 2011-2021, among the fastest in Pennsylvania.
Over the last decade, the region has gotten more diverse. While white people still make up the majority at 70%, with minorities increasing by double-digit percentages and the number of white people have been declining.
Historically, the region’s growth has been propelled by international migration, Lehigh County in particular. But the borders tightened during the pandemic.
While international migration was down during the pandemic as borders tightened, the Lehigh Valley continued to grow because of people moving into the region from other counties.
The 56 largest metro regions, including the regions encompassing Philadelphia and New York City, experienced an aggregate decline in population.
The population shift occurred as U.S. population grew at a tenth of a percent between 2020 and 2021 – the slowest growth rate since the country’s founding, according to the Census.
The U.S. population rebounded by this year, growing by another four-tenths of a percent to 333.3 million as international migration resumed and the number of births increased. Lehigh Valley population data is expected to be published in the coming months.
In 2020-21 academic year, 10,664 students graduated from the 11 colleges and universities in the Lehigh Valley. The number of graduates has been consistent over the last five years, producing an able workforce in the backyards of Lehigh Valley employers.
The region is home to prestigious institutions including Lehigh University, Lafayette College, Moravian University, Muhlenburg College, Cedar Crest College, Penn State Lehigh Valley, DeSales University, East Stroudsburg University and Kutztown University.
Those colleges have produced talent that has shaped the world in which we live for the past century. Among the famous graduates who studied in the Lehigh Valley are Lehigh alumnus Lee Iacocca, who became the chairman of the Chrysler Corp, Lafayette alumna Fran Horowitz, who became President & Chief Merchandising Officer of Abercrombie & Fitch Co and Kutztown alumnus Thomas Hylton, who became a Pulitzer Prize winning writer.
Industrial and flex space in the Lehigh Valley reached 146.9 million square feet in 2022, carrying a 3.3% vacancy rate by year’s end, according to CoStar, a leading source of real estate analytics.
Another 4.7 million was under construction by the year’s end. Since 2017, more than 24.3 million square feet has been added in the two-county area.
Among the notable new manufacturers the Lehigh Valley welcomed into the industrial and flex space this year were: Easy Signs, Spot & Tango, Phoenix Tube, and Pianca Packaging. Others, including B. Braun Medical and OraSure Technologies, increased their industrial footprints in the Lehigh Valley.
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