The Pittsburgh area is kicking off the holiday season on sure financial footing, with the seven-county region’s unemployment rate at a record low, growing workforce and average weekly wages up smartly by 4.9% to $1,376 for the second quarter in Allegheny County compared to a year ago.
But it remains to be seen whether the region can withstand recessionary headwinds driven by torrid inflation, higher interest rates and massive tech industry layoffs nationally, which touched the region with the closure of two promising startups in October. Not everyone is worried though.
“All venture investors are a little skittish right now,” Pittsburgh Technology Council President and CEO Audrey Russo said. “I’m not trying to be Pollyannaish, but I don’t look at this as a dark winter.”
The seasonally adjusted unemployment rate in the seven-county Pittsburgh metropolitan statistical area dropped two-tenths of a percentage over the month to a record low of 4.2% in September, the latest month available for local figures. Over the year, the local jobless rate was down 1.6 percentage points.
Nationally the unemployment rate that month fell by two-tenths of a point from August to 3.5% while the state jobless rate was down by a tenth of a point to 4.1%.
At the same time, total seasonally adjusted nonfarm jobs in the Pittsburgh region increased 3,600 over the month — 0.3% — to 1.15 million jobs in September when compared to August. Over the year, jobs in the local area rose 32,500 or 2.9% while statewide jobs increased 3.4% since September 2021.
More holiday cheer came with the state Department of Labor and Industry’s report that October’s statewide unemployment rate fell to a record 4% in November, down from 4.1% in September. That compared to the national unemployment rate of 3.7% in October.
But clouds are on the horizon with recession fears spawned by massive tech industry layoffs in recent months at Amazon, Meta and Uber among others, which touched Pittsburgh with the unexpected closures of self-driving car startup Argo AI and agricultural innovator Fifth Season within three days of each other in October.
Jobs in Pittsburgh’s sweet spot sectors — meds and eds — have not recovered in the three years since September 2019. About six months later, spiking COVID-19 cases prompted Gov. Tom Wolf to require students, teachers and staff in all public schools to be masked and lockdowns nationally began hitting labor markets.
Still stinging from the pandemic are nursing and residential care facilities, where employment was 31,800 in the Pittsburgh metro area in September, down 13% from the same month in 2019, according to the state Department of Labor and Industry.
Hospitals didn’t fare much better, with employment lagging 11.3% to 51,700 in September, followed by health care and social assistance, down 6.9% in number of jobs to 191,600 when compared to 2019.
Some of those jobs, especially in the medical field, aren’t being filled because of labor shortages that have become common, said Jon Anzur, vice president of public affairs at the Pennsylvania Chamber of Business and Industry, a Harrisburg-based advocacy group. For that reason, the chamber’s stance is that strengthening workforce development should be at the top of the agenda for the state Legislature.
“The demand for labor is there,” Mr. Anzur said. “It’s the case in Pittsburgh, it’s the case in Philadelphia, it’s really the case across the state.”
Despite the lagging growth in Pittsburgh’s meds and eds sector, the technology council’s Ms. Russo sees growth in life sciences as the region’s next economic boost.
“Of course, there’s going to be some reductions and attrition” in the tech industry, she said. “To me, that’s no surprise. But the question is how diversified is our tech economy in terms of revenue?
“Life sciences and biotech is our next real wave.”
Dan Adamski, senior managing director at Jones Lang LaSalle IP Inc., cited the University of Pittsburgh’s acquisition of a new 10-story life sciences building on Fifth Avenue in the heart of Oakland last year.
Pitt owns or occupies 87% of the 3.5 million square feet of lab inventory in the city — including owned and leased properties — he said, and the new research tower adds 261,800 square feet of lab and office space to Pitt’s portfolio.
“While we’d never call any industry recession proof, the life sciences industry is better positioned than most because of its countercyclical drivers that will sustain forward momentum,” according to JLL’s 2022 Life Sciences Research Outlook report, which ranked Pittsburgh 11th nationwide for life science clusters based on talent, funding and real estate infrastructure.
“Science doesn’t stop and investment in new innovations and advanced modalities will continue to drive the industry forward over the long-term horizon.”
Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699
First Published: November 28, 2022, 11:00 a.m.
Updated: November 28, 2022, 11:07 a.m.
