Q2 2012 Pittsburgh, Pennsylvania Commercial Real Estate Economy

CRE Resources

View our Pittsburgh, Pennsylvania Submarket Map

Q2 2012 Pittsburgh, Pennsylvania Commercial Real Estate Economy

After some dark years as the steel industry declined, and despite years of population losses, the metro Pittsburgh economy now seems strong. “How did an old industrial city like Pittsburgh avoid being another Detroit or Cleveland,” Inman News asked. “For one thing, most people don’t realize that Pittsburgh, like Boston, has always been a university city. It boasts two major institutes of higher learning, Carnegie Mellon University and University of Pittsburgh; a medium-size institution, Duquesne University; and three smaller, private four-year colleges. The two key universities boast excellence in a couple of key fields: engineering and robotics at Carnegie Mellon, and medicine at Pitt.” While graduates once left for more prosperous metro areas now “the local technology industries have done very well” and “Biotech, manufacturing technologies, robotics are all interesting and dynamic areas that young people want to be employed in.”

According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm metropolitan Pittsburgh employment was 16,400 (1.4%) higher in July 2012 than it had been in July 2011. The private sector increase was 18,500 (1.8%); the private increase from July 2010 to July 2011 had been 24,500 (2.4%). Pittsburgh now has more private sector jobs than it did in July 2008, before the period of job loss took hold. Household-based data from the BLS on the number of employed residents of the Metropolitan Statistical Area (MSA), including the self-employed, shows a greater increase of 25,600 (2.2%) in the year to June 2012.

Most heartening for a region that has faced the loss of young workers, the labor force increased by 24,300 (2.0%) during the period. Moody’s Economy.com reports 15 consecutive years of population decrease from 1994 to 2008, and predicts a brief end to the trend will be reversed by additional modest declines starting this year. Locals, however, think otherwise according to Inman News. “The important suburban counties, Washington and Butler, actually showed population growth over the past 10 years,” a financial executive said and “Allegheny County (Pittsburgh) showed only a slight population ebbing.” The executive “predicts those days of decline should be over.”

CES data by sector for the latest July-to-July period show widespread employment gains. Among the office-based sectors, the Financial Activities sector was up by 3,400 (4.8%) year-over-year, while Professional and Business Services employment increased by 3,800 (2.3%). Within the latter sector, the strongest growth was in its Professional, Scientific, and Technical Services component at 3,200 (4.5%). The industrial sectors also expanded, with Manufacturing up by 800 jobs (0.9%), Wholesale Trade up 2,000 (4.2%) and Transportation and Utilities up 1,800 (4.5%). With the natural gas business continuing to expand, Mining and Logging added 1,200 (13.8%). “From a high-technology and natural resources point of view,” the financial executive quoted by Inman said, “the economy of western Pennsylvania could start looking like the economy of Texas.”

Pittsburgh’s consumer-driven sectors are weaker. According to CES data Retail Trade sector employment increased by 500 jobs (0.4%) in the year to July, with Leisure and Hospitality up by 4,200 (3.5%). On the other hand, the Construction sector lost another 2,200 jobs (4.0%), as development activity remains weak. While population gains are not robust there, however, Moody’s Economy.com reports a 4.0% increase in household average income in the year to the second quarter.