For some time now the Pittsburgh metro area has posted stronger payroll job gains than the state as a whole, a reversal of the pattern following the 2001 recession that lasted several years. This is not to say that Pennsylvania job growth was robust, certainly not in comparison to many states and the nation as a whole. More recently, through November 2013, the Pittsburgh area registered private sector year over year growth of almost two percent while the state managed a gain of only 0.7 percent, a third of the Pittsburgh area rise.
Meanwhile, the unemployment rate in the Pittsburgh seven county region slid to 6.6 percent compared to a 7.3 percent November rate at the state level. Unfortunately, the reduction in the unemployment rate from a year ago both in the Pittsburgh MSA and the state resulted from a drop in the labor force rather than an upturn in employment as measured by the household survey.
For most analysts and for the estimation of incomes and output, the establishment survey that asks employers how many people are working for them, as opposed to the household survey that asks a random sample of people whether they are working or not, is a superior way of looking at the performance of the economy. For example, a person working two jobs is contributing to the economy at two locations, but in the household survey is counted only once as being employed. For that reason as well as many others, the two surveys often diverge in the estimation of the number of people working and the number of people counted on payrolls.
Interestingly, while different in percentage gains, the growth of jobs in the state and in the Pittsburgh area is similar as far as the sectors showing strength are concerned. For example, both showed gains in construction employment over the past year ending in November. Likewise, jobs in the professional and business service sector registered strong gains across the state, rising 2.1 percent and were very strong in Pittsburgh, jumping about 4 percent in the twelve month period. Health related jobs were up in the region and in the Commonwealth, although the education component lost jobs at the state level as colleges and community colleges reduced payrolls.
On the down side, information employment fell in both the state and region as did manufacturing jobs. Government employment was also slightly lower in both the area and the state.
One employment component reported very different results between Pennsylvania and the Pittsburgh MSA, namely, the mining and logging sector. Whereas the sector posted a 10 percent twelve month increase in the Pittsburgh area, jobs fell by 1.4 percent statewide. One cannot say with absolute certainty but the likely explanation is in the amount of Marcellus drilling activity in the state and in the region. There is speculation that the rise in demand for “wet” gas relative to “dry” gas favors the western Pennsylvania counties as far as new activity and production are concerned.
And there can be little doubt that a substantial pickup in overall business activity is being propelled by the Marcellus drilling and production. This sector could be accounting for a substantial portion of the very strong large growth of jobs in the professional and technical services sector. In turn that strength finds its way into construction, finance, trucking, etc. All told, there the Pittsburgh region has benefitted quite handsomely from the advent of Marcellus gas production.
