Downtown Pittsburgh

The good news: Western Pennsylvania experienced significant economic growth in 2017.

According to the 11th annual Pittsburgh Region Business Investment Scorecard, there were 15 percent more jobs created last year than in 2016, and capital investment reached $5.5 billion.

Information technology, due to increased investments in artificial intelligence and robotics, became the most active sector of the economy.

But the report could have been more robust.

Because of issues including Pennsylvania’s corporate net income tax rate — the highest non-graduated rate in the country — the state is the 44th worst among all states in the Tax Foundation’s Corporate Tax Rank.

In order to compete with other areas of the country, Western Pennsylvania has used its advantages to offset that high tax rate. The region promotes its relatively low housing prices, its strong talent pool provided by local universities and its strategic and safe geographic location. So far, that’s been relatively successful.

“In spite of our dismal state business tax ranking, we are punching above our weight with regard to other magnets for business attraction,” says Jenn Beer, vice president of government relations for the Allegheny Conference. “Our goal is to hone in on those business competitiveness issues where we can move the needle and work to address them. If we can create a more competitive business tax environment to add to our list of attractions, we’ll be even better positioned for future economic growth.”

The scorecard, issued by the Allegheny Conference and Pittsburgh Regional Alliance, tracks economic activity in the 10 counties that comprise Western PA. The information was compiled from media reports, data from the Pennsylvania Department of Commerce & Economic Development and other interactions the organizations have with local businesses.

“It’s not a scientific collection of data, but we think it provides some interesting insights as to what is going on in the regional economy,” says Jim Futrell, vice president of market research and analysis for the Conference.

The highlights include:

  • Projects (expansions of existing companies and relocations of businesses to the area) increased from 245 to 273.
  • The number of new jobs created was 6,600, a 15 percent increase from 2016.
  • There was a sharp decrease in investments, from $10.2 billion in 2016 to $5.5 billion in 2017. David Ruppersberger, president of the Pittsburgh Regional Alliance, says this decline was expected because Shell’s $6 billion investment in the Beaver County ethylene cracker plant was accounted for in full in 2016.
  • The number of projects in the information technology sector increased from 39 to 59, with 30 percent of the deals in robotics. IT also led in the number of jobs created with 1,872.
  • Wages for manufacturing jobs averaged $54,091, 13 percent higher than the national average.
  • The largest employer in the region remains financial and business services, including asset management and banking, with more than 230,000 employees.

Prospects for 2018 are generally upbeat, and while Ruppersberger says looking ahead is always a tricky proposition, he’s cautiously optimistic that the region’s upward growth pattern will continue. Notably, manufacturing growth is stable and investments by energy companies remain steady.

Financial and business investments are “middle of the road” so far this year, Ruppersberger says, but the IT sector is off to “a very strong start in 2018.” It will likely top next year’s scorecard unless there are unexpected developments.

Rege Behe

Rege Behe is an award-winning journalist, writer, and editor. A native of Trafford, Pa., he's covered school board meetings, reviewed concerts, and interviewed Pulitzer Prize-winners including Michael Chabon, Ron Chernow, and David McCullough. He never goes anywhere without a book, likes to hike, and is fond of animals.