Monday, January 21, 2008
The preliminary job statistics for December show continuing bad news about the Pittsburgh Region's economy. The November job totals were revised downward from the preliminary figures (instead of 3,000 net new jobs between November 2006 and November 2007 as the preliminary figures had showed, there were actually only 2,100 net new jobs created here during that period). The December figures are even worse -- there were only 900 more jobs here in December 2007 compared to December 2006.
In fact, Pittsburgh had the fourth worst job growth rate in December of any of the top 40 regions in the country. The job growth rate in the Pittsburgh Region for December was only 0.08% (less than 1/10 of 1 percent), down from .18% the prior month, and down from .71% in December a year ago. That's an almost 90% drop in job creation from a year ago.
Not surprising, you may say -- everybody knows the country is teetering on the brink of a recession, if it hasn't already entered one. And indeed, the U.S. job growth rate dropped below 1% in December (to 0.92%), the lowest rate of job creation since 2004.
But the Pittsburgh Region seems to be falling harder and faster than other places in the country. Whereas Pittsburgh's job growth rate was about 20-30% of the U.S. growth rate during the summer, in December it fell to under 10% of the U.S. growth rate -- the lowest ratio since April 2006.
Moreover, the Pittsburgh Region had the second largest drop in the job growth rate compared to the prior year of any of the top 40 regions in the country. A number of regions continued to grow faster in December than the previous year (including regions similar to Pittsburgh, like Baltimore, Cincinnati, Cleveland, Milwaukee, Philadelphia, and St. Louis), and even in previously fast-growing regions like Austin, Charlotte, Orlando, and Silicon Valley, the job growth rate declined by only 33%-40%. The 89% drop in Pittsburgh's job creation rate was exceeded by only one other major region - Providence, Rhode Island, which had a 90% drop.
What's causing our poor performance? Several sectors have lost a significant number of jobs over the past year -- construction is down 900 jobs, manufacturing is down 2,100 jobs, and retail is down 1,100 jobs. And the health care sector, while it is still growing, is growing at only half the rate it was a year ago. The only sectors that have experienced improved job growth are wholesale trade and professional and business services.
Pittsburgh's economy has been growing at a snail's pace for most of the year, and now it looks like the recession may hit us harder than most other areas. It's too soon to know for sure how bad things might get, but it calls for redoubling efforts to make our business climate as competitive as possible, so our existing businesses can retain as many jobs as possible and to take advantage of growth opportunities that do exist.