Allentown: Economy

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Major Industries and Commercial Activity

Manufacturing, at one time the dominant activity in the Allentown metropolitan area, continues to decline to just 15 percent of total employment in the area. The service sector now dominates employment in the area, concentrated in the area of health services. Jobs in this sector continue to grow at a rapid pace; many businesses report having trouble finding qualified workers available positions. According to the Lehigh Valley Economic Development Corporation, 33,000 new jobs were created between 1996 and 2004. The metropolitan area has been selected as the headquarters or principal plant locations for major corporations such as Mack Trucks and Bethlehem Steel, as well as Fortune 500 companies Air Products and Chemicals, and PPL Corporation.

Items and goods produced: steel products, industrial equipment, food products, electrical and mechanical equipment, clothing and textiles, trucks, chemical and mineral processing equipment, fabricated metals, furniture

Incentive Programs—New and Existing Companies

Local programs

The Allentown Economic Development Corporation (AEDC), a nonprofit corporation managed by a board of directors representing the leaders of business, industry, civic groups, and city government, has as its mission the long-range economic growth and diversity of the city of Allentown. AEDC operates the Bridgeworks Enterprise Center, a facility that offers tenants shared centralized services such as educational business counseling and management and financial assistance. Relocation assistance is available for those companies that outgrow the incubator space. The Lehigh Valley Economic Development Corporation (LVEDC) offers a variety of financing options, education and training venues, and technology support services. Three enterprise zone programs are available in the region to help stimulate growth. These programs emphasize assisting industrial, manufacturing, and export service firms. Tax credits of up to $250,000 are also available for eligible projects. The Small Business Development Center at Lehigh University and the Team Pennsylvania Lehigh Export Network also help companies with expansion and growth.

State programs

Funding programs offered by the state include bond financing, grants, loans and loan guarantees, tax credits and abatements, and technical assistance. The Lehigh Valley Keystone Opportunity zone consists of 642 acres of land within Lehigh and Northampton counties, including a technology-ready corridor in downtown Allentown. These areas will remain virtually tax-exempt until 2013. Four state Enterprise Zones in Philadelphia are eligible for numerous incentives, including state tax credits, security rebates, low-interest loans, and technical assistance. The state's Job Creation Tax Credits program provides $1,000-per-job tax credit to approved businesses that agree to create jobs within three years.

Job training programs

The region has available a network of specialized training programs, numerous recruitment assistance packages, connections to a variety of workforce training providers and innovative partnerships between education and industry, including Eastern Pennsylvania Training WORKS Partnership, Lehigh Valley Team Pennsylvania CareerLink, and WEDNet Pennsylvania's Guaranteed Free Training Program. The most widely used state and federal programs to help employers reduce the costs of hiring and training workers include the federal Workforce Investment Act (WIA), customized job training funded by the Commonwealth of Pennsylvania, Targeted Jobs Tax Credit Program, and a state tax credit Employment Incentive Payment Program.

Development Projects

Plans are underway in Allentown for an ambitious downtown revitalization project that includes a new attraction, Lehigh Landing. One of the projects planned is a multipur-pose complex on a former industrial property along the Lehigh River. Several turn-of-the-century industrial facilities will be renovated for the complex, using a combination of public and private funds. The anchor for this project will be the America On Wheels Transportation Museum, to be located in a former Lehigh Valley Transit Company building. A ground-breaking ceremony was held for the museum in April 2005. Over-the-road transportation exhibits have already been promised by the Smithsonian Institution, as well as from Mack Trucks, whose headquarters is located in Allentown. The Lehigh Landing project includes a river walk and a tie-in to the Delaware and Lehigh Canal, as well as boating activities along the river.

The Pennsylvania Expo Center at Lehigh Valley is the region's newest and largest exhibition facility. This state-ofthe-art facility offers more than 95,000 square feet of contiguous ground-level exhibition space.

In March 2005, Lehigh Valley Economic Development Corporation (LVEDC) announced the approval of funding for the development of the Allentown Brew Works. The build-ing's first three floors will house the restaurant, microbrewery, and a banquet facility for up to 200 people, along with a lounge in the basement. The fourth and fifth floors will be converted into commercial office space.

In August 2006, Olympus, a technology leader in healthcare and consumer electronics, will relocate its North American headquarters facility and distribution centers to the Lehigh Valley. The high-tech firm CryOptics, which designs, develops, and manufactures optical engines, has also announced plans to relocate its headquarters to the area.

Economic Development Information: Allentown Economic Development Corporation, 718 Hamilton Street, Allentown, PA 18101; telephone (610)435-8890

Commercial Shipping

Twenty-five percent of the nation's population lives within a 250-mile radius of the Allentown-Bethlehem-Easton metropolitan area, linked to it by major highways, Lehigh Valley International Airport, and Queen City Municipal Airport. More than 50 motor freight carriers provide daily service in the area, and Norfolk Southern operates a major rail classification yard in Allentown.

Labor Force and Employment Outlook

The labor pool in the Lehigh Valley is described as highly skilled and possessing a strong work ethic. Jobs in the business services sector have accounted for a large increase in the area's employment. Severe workforce shortages of qualified candidates in the healthcare occupations continue in the region. Employment projections for the area show a continuing decline in the number of jobs in manufacturing, agriculture, and mining, though a recent burst of new construction projects has meant a slight increase in some manufacturing jobs. Jobs in the retail and service sectors are projected to increase, particularly high-tech jobs.

The following is a summary of data regarding the Allentown metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 329,100

Number of workers employed in . . . construction and mining: 15,800

manufacturing: 45,300

trade, transportation, and utilities: 66,700

information: 7,700

financial activities: 16,200

professional and business services: 35,300

educational and health services: 57,500

leisure and hospitality: 29,000

other services: 15,200

government: 40,300

Average hourly wage of production workers employed in manufacturing: $14.54

Unemployment rate: 4.4% (April 2005)

Cost of Living

The following is a summary of data regarding key cost of living factors in the Allentown area.

2004 ACCRA Average Home Price: Not reported

2004 ACCRA Cost of Living Index: Not reported

State income tax rate: 3.07%

State sales tax rate: 6%

Local income tax rate: 1%

Local sales tax rate: None

Property tax rate: $7.31 per $1,000 of market value

Economic Information: Allentown Economic Development Corp., 718 Hamilton St., 7th Floor, PO Box 1400, Allentown, PA 18105-1400; telephone (610)435-8890. Allentown City Planning Commission, 435 Hamilton St., Allentown, PA 18101; telephone (610)437-7611