The Lehigh Valley economy is booming according to new data released by the U.S. Bureau of Economic Analysis.
With manufacturing making up the largest part of the region’s economy in 2021, the region’s Gross Domestic Product soared to a record $47 billion.
The GDP measures total market value of the goods and services produced in a region over a year.
With an economic output of $8.4 billion, manufacturing has now overtaken finance, insurance and real estate as the Lehigh Valley’s top contributor to the GDP, according to the Lehigh Valley Economic Development Corp.
Manufacturing made up 18% of the Lehigh Valley’s private sector output compared to 12% in the nation as a whole last year.
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.
“It seems that each year a new chapter is written on the economic renaissance of the Lehigh Valley,” said Don Cunningham, president & CEO of the LVEDC. “2021 was another record-setting year with the region’s GDP increasing by almost $5 billion and manufacturing taking the top spot as the Lehigh Valley’s largest economic sector.”
The private sector economic output has recovered from the adjusted figure of $42.5 billion during the first year of the COVID-19 pandemic in 2020. After factoring in inflation, the GDP rose by 6.4% from 2020 to 2021, Cunningham said.
The Lehigh Valley metro region includes Lehigh, Northampton, Carbon and Warren counties. Lehigh and Northampton County make up $40.6 billion of the metro region’s $47 billion private sector output.
Cunningham noted that the Lehigh Valley’s private sector output is the 65th largest in the nation and is bigger than the entire states of Alaska, Vermont and Wyoming.
If the Lehigh Valley were a country, its economy would be the 88th largest in the world, he said.
Following manufacturing, the largest sectors in the Lehigh Valley’s GDP:
One sector that had yet to recover from the pandemic was arts, entertainment, recreation, accommodation, and food services. Among the hardest during the pandemic-induced downturn, Cunningham said that sector produced an output of $1.8 billion last year.
He said the Lehigh Valley’s output has been steadily rising over the last five years, even when accounting for the drop during the pandemic. The Lehigh Valley’s private sector output has increased at a compound annual rate of 1.4% over the last five years.