Another Step Forward (by Harold D. Miller)

Like an engine that isn’t quite in tune yet, the Pittsburgh Region’s economy has been recovering in fits and starts. On balance, however, it’s improved during the first half of the year, and the improvement here has been greater than in most of our benchmark regions. PghvsUSJobs24MoJune2010

Here are the facts: The region added 7,700 jobs from May to June. Although that sounds like lot, much of that is due to typical seasonal hiring; the region typically adds between 4,000 and 8,000 jobs in June due to seasonal factors. In fact, the only year the region didn’t add thousands of jobs in June was last year, and even then, in the depths of the recession, the region only lost 100 net jobs.

What is really news is that total jobs went up so much in June despite the fact that the region lost 1,400 federal jobs due to the end of short-term Census employment. Total jobs increased because of a strong showing by the private sector: private businesses added 9,300 net new private sector jobs in June, the 6th highest rate of growth in private sector jobs in Pittsburgh between May and June in the past 20 years. That’s also above average performance compared to our benchmark regions; only Baltimore, Cincinnati, Cleveland, Denver, and Minneapolis had stronger private sector job growth in June than Pittsburgh. PrivateSectorJobsMayJune2010

But even that ranking is actually better than it appears. Because the Pittsburgh Region lost fewer jobs during the recession than other regions, merely average growth during the recovery will keep us ahead of them, and above average growth will further widen our lead. In fact, if you compare where we stand today to two years ago (June 2008), before the recession really took hold, the Pittsburgh Region has lost fewer jobs than any of our benchmark regions. Perhaps more dramatically, most other regions have lost at least twice as many jobs (in percentage terms) as we have. For example, while Pittsburgh still has 28,000 fewer jobs today than it did two years ago, Charlotte has 54,000 fewer jobs, Denver has 80,000 fewer jobs, and Detroit has lost over 200,000 jobs.

However, looking ahead, we can’t take for granted that our above-average performance will continue. For example, the major layoffs announced by the West Penn Allegheny Health System will make it unlikely that the health care sector can continue to offset losses in other sectors the way it has for the past two years.

And although it’s good news that our manufacturing sector added 200 jobs between May and June, that growth rate pales in comparison to most of our benchmark regions. We can’t expect to continue to stay ahead of other regions if our manufacturing sector doesn’t recover, because half of the jobs the region lost over the past two years have been in manufacturing, a higher share by far than any of our benchmark regions. ShareofJobLossesDuetoManuf

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