New data shows the Lehigh Valley’s Gross Domestic Product surpassed the $50 billion threshold in 2022, a record for the region which has added $10 billion to its economic output in five years.
The output measures the sum of goods and services for the metro region, which includes Lehigh, Northampton, Carbon, and Warren (N.J.) counties.
That productivity has led to more opportunity for the region’s residents, driving the median household income up and poverty down.
Updated regional GDP data for 2023 won’t be released until December 2024, and the economic environment is constantly changing. Here are some of the indicators that the Lehigh Valley Economic Development Corp. (LVEDC) is tracking now:
National GDP
The national GDP grew at an annual rate of 4.9% from the second to the third quarter of 2023, increasing in 15 of 23 industry groups, according to the Bureau of Economic Analysis.
At 5.6% growth, Pennsylvania outperformed much of the country and grew at the fastest rate in the Northeast. The Lehigh Valley has historically been an economic engine for the Keystone State.
Employment
The number of jobs at businesses in the Lehigh Valley metro region grew to 394,500 in November, when adjusted for seasonal fluctuations. That’s 7,300 more than November 2022, according to the Pennsylvania Center for Workforce Information and Analysis.
Employment by sector is not seasonally adjusted for metro regions. When comparing the number of jobs year-over-year, the Lehigh Valley saw its biggest job gain – 4,000 – among health care and social assistance employers. There were 2,000 hospitality jobs added and 1,500 in professional and business services.
Manufacturing and logistics – key drivers in the growth during the pandemic – were down by 100 jobs and 1,300 jobs, respectively.
The November unemployment rate for residents in the metro region was 3.9%, slightly down from 4.2% in November 2022.
Industrial Real Estate Demand
Industrial space is still growing in the Lehigh Valley, but at a slower pace. The amount of industrial and flex space under construction hit a high in the third quarter of 2022 at 7.3 million square feet, according to CoStar, a leading source of real estate analytics. By the third quarter of 2023, the amount of space under construction dropped to 2.7 million square feet.
The market remains strong, at $9.09 of NNN industrial rent per square foot, a 30% increase in two years. Rent remains more affordable than nearby markets in northern and central New Jersey and southeastern Pennsylvania. The affordability and proximity to a third of the U.S. population within a day's drive continue to make the Lehigh Valley a desirable place to do business.
Manufacturing
Manufacturing drives Lehigh Valley’s economy. Propelled by iconic companies like Crayola and Mack Trucks, manufacturing output in the region reached $8.1 billion in 2022.
The industry, however, is showing some slowdown. The Federal Reserve Bank of Philadelphia, which produces research in eastern and central Pennsylvania, southern New Jersey, and Delaware, publishes a Manufacturing Business Outlook Survey. The December survey shows that firms reported a decline in current manufacturing activity, but expectations for growth over the next six months are rising.
Exports
The Lehigh Valley metro region exported $4.9 billion worth of products in 2022, making it the 67th largest exporter in the U.S., according to the International Trade Administration. The region’s biggest export is chemicals, at $1.9 billion, and computer and electronic equipment at nearly $500 million. The Asian-Pacific Economic Cooperation (APEC) is sent the most exports.
In the first half of 2023, the Lehigh Valley exported $100 million of goods more than the previous year, according to the U.S. Census Bureau.