Garner: The Lehigh Valley will have to work together and be committed to raising the bar for economic development.

EDITOR’S NOTE: The following is taken from the recently published Competitive Realities report that was created by Jay Garner of Garner Economics of Atlanta, Ga. The bottom line is that Lehigh Valley is rich in assets.

The Lehigh Valley of Pennsylvania, consisting of Lehigh and Northampton counties (region), offers a tremendously strong mix of assets for businesses that are contemplating relocation or expansion.

Garner Economics analyzed 66 community and regional factors as part of the assessment. Ratings were identified by evaluating the region’s position for each of the factors against the Commonwealth of Pennsylvania, the United States, and, in many instances, the benchmarked geographies of Allegheny County, Pa., as well as the combined counties of Guilford and Forsyth, N.C.

Of the 66 variables analyzed, 38 are considered an Asset and 11 a Challenge (17 rated as Neutral). This ratio of Assets to Challenges is one of the strongest positive ratios we have conducted and analyzed over the last 11 years. The diverse and rich assets of the Lehigh Valley have made the region a global competitor and differentiate the area from many of the 3,141 counties that exist in the United States.

Labor

Cost of labor is an asset for employers considering Lehigh Valley as a place to do business. Labor costs are below the benchmarks of the United States, Commonwealth of Pennsylvania, and Allegheny County, but higher than Forsyth/Guilford County, N.C. Vocational and technical education is also an asset with institutions like Lehigh Carbon Community College and Northampton Community College. The Lehigh Valley is also the home to seven four-year and postgraduate degree higher education institutions with more than 50,000 full- and part-time students. Lehigh University and Lafayette College offer four-year and postgraduate degrees in various engineering curriculum.

Focus group respondents and data analysis from Garner Economics note shortages in available technicians and scientists, and from managerial personnel. Public and private unionization is also higher than all but one benchmark.

Access to Resources

The Lehigh Valley has a long history as a manufacturing and agricultural region. Regional manufacturing employment is 11% compared to the US average of 9%. Excess water and wastewater/sewer capacity in Lehigh Valley creates advantages and opportunities. There are more than 20 water and sewer authorities in the Valley with water capacity in excess of 136 mgpd and an average daily usage of 50 mgpd. Sewer/wastewater capacity is equally advantageous. Equally important is the value of agriculture to the region. Lehigh and Northampton counties rank 20 and 23 respectively out of 67 PA counties in the value of agricultural production.

Commercial and industrial electric rates are higher than the benchmark communities of Allegheny County, Pa. and Greensboro/Winston Salem, N.C.

Access to Space

Lehigh Valley has industrial and office sites that meet the definitions of fully served and shovel-ready sites. The region ranked neutral in regards to access to reasonably priced and suitable industrial and office space. According to a 2013 3Q report by NAI Summit, there is 56,801,599 sq. ft. of industrial space, of which 4.1 mm sq. ft. is available for rent—a 7.3% vacancy rate. This limited sq. ft. availability will stress business development opportunities within the industrial sector. As it relates to office space, there is 11,443,045 sq. ft. of space, of which 1.5 mm sq. ft. is available—a 13.4% vacancy rate.

Access to Capital

There are several programs that can provide low-interest or no-interest financing to fund construction, land, equipment, and working capital. LVEDC is a conduit for many of these programs. Early stage or venture capital availability gets mixed reviews by entrepreneurs and small businesses that participated in focus groups. However, as it relates to technology-based companies, the Ben Franklin Fund of NE PA was looked upon favorably for those companies that fit within its mission of providing funds for early stage and startup operations.

NOTE: To read last week’s installment, click here.