Why Pittsburghers’ ‘loyalty’ could attract companies to expand here

Three years since the start of the COVID-19 pandemic (yes, really), the Pittsburgh region’s economic recovery is ongoing. But new data indicate it’s doing better than the national average in some key categories.

Pennsylvania Economy League of Greater Pittsburgh, the public policy research arm of the Allegheny Conference on Community Development, just published the latest edition of its Southwestern Pennsylvania Quarterly Vitals report. Focused on October to December 2022, the Q4 report focuses on the region’s business conditions, COVID-19 recovery and workforce, including turnover rate.

Stats were compiled from the likes of the Bureau of Labor Statistics, real estate firm CBRE and regional partners such as Pittsburgh International Airport, and reflect the most currently available data.

See the report

Ellen Gaus, the Allegheny Conference’s market research manager, told Technical.ly the chosen stats allowed the researchers to “paint a bigger picture of what’s going on in the regional economy.”

That includes comparing the region with others. Notably, Pittsburgh’s turnover rate — the rate of workplace separations compared to total jobs — for Q4 was 57%, versus a national average of 71%. That’s also the second-lowest rate of 15 other regions across the US, including “peer” regions such as Detroit and Milwaukee (the most similar to Pittsburgh), “competitive” regions like Philadelphia and Baltimore (“cities we know we frequently compete with,” especially for companies exploring expansion markets), and “aspirational” regions such as Seattle and Denver (“cities we want to be like”). Only Boston, named an aspirational region, had a lower rate at 55%.

Low turnover as a selling point

The stickiness of the region’s employees could be a selling point for companies looking to place their next hub.

“The workforce in Pittsburgh is highly more likely to stay within their occupation than in other cities,” Gaus said. “From an employer perspective, that’s an important thing to see, that if I choose to [expand my company to] Pittsburgh, that workforce is more reliable than if I were to go to a bigger city like Denver or Austin or Charlotte.”

What makes Pittsburghers so relatively likely to stay in their jobs? Call it regional “loyalty,” for one, said Jim Futrell, VP of market research at the Allegheny Conference. The population doesn’t change as dramatically year over year as some benchmark regions.

“Pittsburgh tends to be a little bit more of a rooted community,” Futrell said. “There’s a lot less people moving in and out; we have one of the highest percentages of people who were actually born in the region here.”

It could also be the case that faster population growth means more job creation which means more talent poaching, so in some other cities, “people tend to look around a little bit more — whereas here, it’s a much more stable population, so people tend to stick with the opportunities they have,” he said.

Recession resilience

While a long-predicted recession hasn’t yet hit the United States, one will inevitably come at some point as the economy changes. When it does, Pittsburgh’s slower population growth and stable industries could be a good thing.

“We tend to go into recessions a little bit later [compared to] the rest of the country, and come out a little bit later,” Futrell said. “We don’t have a lot of growth regionally, and that tends to reduce the risk of an economic bubble in the region where you might grow a little too fast, overheat, and then it really takes you some time to come out of it in a recessionary environment.”

Pittsburgh’s five largest industries are manufacturing, business and financial services, technology and robotics, life sciences/healthcare and energy, per Futrell. The market’s diversity translates to a softer “cushion” during economic downturns. Contrast that with the likes of San Francisco, where an over-reliance on tech means an empty downtown and slower post-pandemic recovery.

COVID-19 recovery surprises

Gaus noted that the region lags a bit in COVID-19 recovery, compared to national averages. Still, that lag has been consistent over the course of the pandemic. (The Economy League has been producing these Quarterly Vitals reports since 2021.)

The leisure and hospitality sector is a standout, with local employment at 96.4% of its December 2019 level, compared to 96.8% across the US. Even if it’s not at the national average, Futrell said he was surprised by that stat because the region isn’t necessarily known as a tourism or convention hub.

Leisure and hospitality was, of course, one of the industries most negatively impacted by the pandemic, and “accounted for the bulk of our employment shortfall throughout that entire year,” he said. But as business travel returned a year later, and the Pittsburgh Cultural Trust reopened for live performances, “you did not see the traditional seasonal contraction over the winter of 2021 into 2022.”

“Employment remained steady,” he said, “and so when they started ramping up again in spring, they were building off a higher base.”

###

Some other standout stats from the Quarterly Vitals report for Q4:

• From December 2021 to December 2022, the region’s workforce grew by 2.6%, for a total of 1,177,164 participants, compared to a national average of 1.6%, and 0.8% for benchmark regions.
• Unemployment for Southwestern Pennsylvania shrunk by 0.8% over that year, to 3.7%.
• Regional office vacancy decreased by 1.3 percentage points over the year, to 15.5%.

Next up from the Economy League is its complementary Business Investment Scorecard, as well as employment and population reports for the full year. Look for both in the coming weeks.