Last week, the Bureau of Economic Analysis released a report on the Gross Domestic Product (GDP) of 383 metropolitan areas in the United States for 2017.?? Pittsburgh’s GDP was $144 billion, placing 25th overall in the United States, just behind Austin and ahead of Tampa.?? As a point of reference, if Pittsburgh were a country, it would be the 59th largest economy in the world behind Hungary.
The view from 30,000 feet is good, but once you peel the layers of the report back it gets even more interesting.?? Pittsburgh’s economy grew by 3.7%, the 45th highest percentage.?? And of that 3.7%, 1.89% was due to a single sector — Natural Resources & Mining.?? Over half of Pittsburgh’s economic upswing can be attributed largely to the natural gas drilling boom in the Marcellus shale and, to a lesser extent, the slight rebirth of coal resources.
The 1.89% increase in the Natural Resources & Mining sector was the 12th largest among the 383 metropolitan areas.?? The vast majority of the communities ahead of Pittsburgh in growth in this sector were smaller areas, like Beckley, WV (+8.79%, 340th largest economy) and Casper, WY (+2.22%, 273rd largest economy).?? But areas like Houston (+2.72%, 7th largest economy) and San Antonio (+2.47%, 34th largest economy) were in the mix, too.
It’s good to see Pittsburgh’s economy doing well.?? A rising tide lifts all boats.?? After hearing about ‘eds and meds’ for so long and starting to feel that’s all Pittsburgh’s new economy was about, diversification of any sort is good.?? However, natural gas fracking seems like a slippery slope to be trumpeting for your economic breakout.?? Not only is it an environmentally delicate subject, it feels as if its very existence is subject to a boom-bust cycle.?? Even 10 years ago things were different.?? Now that natural gas prices are so low market-wide, many gas pads sit idle.
Manufacturing was only up 0.20% in 2017, so perhaps by the time the Shell ethane cracker plant opens up in 2021, tentatively, it can offset some of the potential drop in the Natural Resources & Mining sector.?? Shell has started to seek out the first 40 of a potential 600 jobs for the plant that will produce pelletized polyethlene.?? This is a potentially great synergy between the two sectors that can help each other offset the valleys.
Information was up 0.24% in 2017.?? I’m not ready to say that between Google’s satellite office, Uber’s Strip/Almono center, and the other various tech companies here that Pittsburgh has peaked in terms of this sector, but I’m not sure how much more room there is to grow, either.?? Naturally, if Amazon were to somehow select Pittsburgh as the site of their new HQ2, that’s a game changer.?? But more realistically it feels like Pittsburgh is at a plateau, hopefully of a temporary nature until the next upswing occurs.
Construction was also up 0.24% in 2017.?? With all of the infrastructure upgrades by utilities planned for the region as the service lives expire from assets installed in the 1950’s (and earlier), coupled with the huge wastewater infrastructure planned by ALCOSAN and the surrounding communities to deal with wet weather overflows, there seems to be a lot of runway left for this sector to keep growing.
The good news is that Pittsburgh has a robust and diversified economy.?? The days when the city revolved around steel and suffered its decline into rust belt status are gone.?? Pittsburgh is a growing economy with a vibrant workforce that is improving each year in depth and quality.
In you would like to peruse the Bureau of Economic Analysis’s report, it can be found here.