Unemployment is low, home values are rising and despite looming demographic challenges, the Pittsburgh regional economy is strong, according to a new report from the Federal Reserve Bank of Cleveland.
“Pittsburgh is on a slow and steady course,” said Mekael Teshome, vice president and senior regional officer of the Pittsburgh branch of the Federal Reserve Bank of Cleveland. “All in all, Pittsburgh’s outlook is favorable, with persistent and moderate growth ahead.”
Teshome and Fed Research Analyst Julianne Dunn co-authored the study as part of the bank’s ongoing series of Metro Mix reports on larger cities within the Federal Reserve’s 4th District, which includes Ohio, Western Pennsylvania, Eastern Kentucky and the West Virginia panhandle.
Using a variety of public data released in the last year, the bank’s experts break down the overall economic conditions and prospects of our region.
In a summary of their findings on the Federal Reserve Bank of Cleveland’s website, the authors note that the region’s unemployment level has held steady at 3.8 percent since April of this year. “This is the lowest unemployment rate since at least 1990,” the report noted.
In line with national trends, the region’s construction sector saw the most growth over the last year, increasing 5.7 percent from December 2017 to December 2018.
Additionally, “manufacturing and education and health services sectors also saw significant employment gains, growing 1.9 percent and 3.0 percent, respectively, during the same period.”
Home prices also saw modest increases, rising by 1.9 percent, or $2,700, from June 2018 to June 2019.
While Pittsburgh made notable gains across several metrics, the authors note that our region’s positive trends are in many cases still lagging behind state and national averages.
“We have an economy that neither booms nor busts,” Teshome explained in a phone call with NEXTpittsburgh. “The downside to that is we don’t grow as quickly when the rest of the country is growing, but if we were to have a downturn nationally, I would expect Pittsburgh’s economy to hold up fairly well.”
Additionally, the authors warn that “a shrinking and older-than-average population could limit the Pittsburgh metro area’s economic growth,” noting that the median age of the population has increased by 1.2 percent since 2017.
“When you have fewer people over time, that means there’s less demand,” said Teshome. “It’s not just that we’re losing people, but our population is older than average.”
As the study notes, the trend could create worker shortages over time, as the pool of young workers to replace retirees shrinks every year.
“On a positive note, the metro area’s population is, on average, better educated than the nation’s,” said the report, “and this can help attract high-wage, high-skilled employment.”
Check out the full study, along with past Metro Mix reports, here.
