Manufacturing and Other Industries Set Their Sights on Expansion

• Pennsylvania's economy is bolstered by a $116 billion manufacturing sector increasingly focused on high-tech innovation and research and development to drive future growth.
• Growth in the manufacturing, healthcare and education industries is driving housing demand, but builders have struggled to keep up with these needs as they face inflation and worker shortages.
• In response to the state’s economic opportunities, corporate investment is accelerating. Businesses should contact their lender as early as possible to set themselves up for success.

Manufacturing is a critical economic driver for Pennsylvania, contributing more than $116 billion annually to its economy — and that momentum will continue. Business owners and investors in the state and beyond are witnessing significant innovation and  investment into the future of manufacturing.

“There’s been a big push to make Pennsylvania a center of high-tech manufacturing and we anticipate more growth and success in that space going forward,” says Michael McCarty, C&I Commercial Market Executive at Northwest Bank. 

The state’s numerous research and development facilities, high-quality university systems and commitment to STEM education and industries have laid the foundation for a thriving advanced manufacturing industry, according to Pennsylvania’s Department of Economic and Community Development. 

A supportive financial ecosystem also helps. McCarty notes that Northwest Bank recently facilitated a $30 million commercial loan to support a medical device manufacturer that plans to expand its footprint in the Commonwealth. “It’s a project that generates hundreds of jobs and sets the stage for continued innovation and growth,” McCarty adds.

Other sectors of manufacturing, including food and agricultural production, are also leveraging Pennsylvania’s robust infrastructure and favorable regulatory and tax environment to grow their business in the Commonwealth.

Housing needs drive growth

The growth in manufacturing and the Commonwealth’s healthcare and education industries is generating jobs and housing demand. Against this backdrop, the construction industry has proved another economic heavy hitter.

Many homeowners took advantage of record-low mortgage rates during the pandemic and have been reluctant to sell their homes and give up their desirable rates. The result has been less residential inventory and high pressure on builders to bolster the housing stock with new construction. “The developers can’t keep pace with the flurry of housing demand that’s characterized many of the state’s local real estate markets,” McCarty says. 

Lastly, the Commonwealth’s agricultural and industrialized farming industry is also a significant contributor of jobs and economic growth. Pennsylvania’s 53,000 farms generate more than 600,000 jobs and $132 billion for the economy, according to the governor’s office. The latter also recently announced a $10 million grant program to fund cutting-edge agriculture innovations and technologies.

Business takeaways 

McCarty says many companies were waiting for the presidential election results and the related economic uncertainty to subside before approaching new expansion or capital improvement projects. As 2025 progresses, he sees corporate investment in the Commonwealth accelerating. 

“If you’re planning to make a capital investment in your business, you want to contact your lender early in the process,” he says. “We can help structure the loan in ways that align with your objectives and enable the flexibility required to meet the daily demands of your company.”

McCarty notes that outside of traditional investment and expansion activity, the bank is also seeing growing interest in Employee Stock Ownership Plans. Business owners readying to retire are exploring how they can extract the value from their company while protecting employees and the legacy they’ve built. “ESOPs offer an increasingly popular alternative, especially in the manufacturing space,” he says.

Finally, McCarty says working with a local bank that understands Pennsylvania’s economic landscape and opportunities is paramount. “Companies deserve a partner they can connect with in person and who understands not just their business but the environment they’re operating in,” he says.