03.28.07

Economic Trends

The Pittsburgh Metropolitan Statistical Area

Christian Miller and Brian Rudick

The Pittsburgh Metropolitan Statistical Area (MSA), home to more than 2.3 million people, is the District’s largest metro area. (The MSA is composed of Alleghany, Armstrong, Beaver, Butler, Fayette, Washington, and Westmoreland Counties.) Surprisingly, Pittsburgh’s share of employment in manufacturing is smaller than the nation’s. This wasn’t the case in the 1970s and early 1980s, but since then, manufacturing’s share of total employment has fallen faster in Pittsburgh than in the U.S. On the other hand, the metro area’s share of employment in the education and health services industry is 1.5 times larger than the nation’s. It is the MSA’s second-largest sector (behind trade, transportation, and utilities), accounting for about one-fifth of total employment.

Since the last business cycle peak, in March 2001, Pittsburgh has lost 1.5 percent of its jobs, compared to Pennsylvania’s gain of 1.2 percent and the nation’s gain of 3.6 percent. In this respect, the metro area bears a closer resemblance to other Fourth District MSAs than to Pennsylvania as a whole. Pittsburgh’s employment growth began to improve in 2006.

Since the last business cycle peak, Pittsburgh has increased its nonmanufacturing employment by about 1 percent, whereas the U.S. is up 6.6 percent. In addition, manufacturing employment losses over this period were more severe in the metro area (21.4 percent) than in the nation (16.6 percent).

Not surprisingly, a look at the components of employment growth shows that manufacturing has been a drag on total employment growth for the past six years, although its negative impact has lessened over the past four. Transportation, warehousing, and utilities also weighed down employment growth. Service industries, on the other hand, have been critical for job growth over the past six years. Education, health, leisure, government, and other services have contributed an average of 0.5 percentage point to total employment growth in each of those years.

Since January 2006, Pittsburgh’s employment has increased 1.0 percent, compared to the nation’s gain of 1.6 percent. Although U.S. employment growth outpaced that of the metro area, the only industries that posted job losses in Pittsburgh were trade, transportation, and utilities; and financial activities. Moreover, the MSA’s rate of employment growth in natural resources, mining, and construction industries outpaced the nation’s by more than 1 percent.

The MSA’s unemployment rate has closely tracked the nation’s for the past decade. In January, Pittsburgh’s unemployment rate was 4.8 percent, compared to 4.6 percent for the U.S.

Except for three years in the early 1990s, the population growth rate has been consistently negative in the metro area since 1980. By contrast, the nation’s population has grown steadily since then, at an annual rate of about 1 percent.

Pittsburgh’s population, like Pennsylvania’s, has a smaller percentage of minorities than the U.S, although the MSA is still more homogenous than the state. Of Pittsburgh residents aged 25 and older, 27.1 percent have attained a bachelor’s degree, compared to 27.2 percent for the nation and 25.7 percent for the state. Pittsburgh is home to more elderly residents (65 and older) than either the state or the nation and has a higher median age.

Selected Demographics

  Pittsburgh
MSA
PA U.S.
Total population (millions)
2.3
12.0
288.4
  Percent by race
    White
90.1
85.5
76.3
    Black
8.6
10.7
12.8
    Other
1.3
3.8
10.9
  Percent by age
    0 to 19
23.8
25.5
27.8
    20 to 34
17.0
18.1
20.1
    35 to 64
42.7
41.7
40.0
    65 or older
16.5
14.6
12.1
Percent with bachelor’s degree or higher
27.1
25.7
27.2
Median age
41.7
39.7
36.4

In 2005, Pittsburgh’s per capita personal income was $36,208, exceeding that of the state ($34,848), the nation ($34,495), and the average for all metropolitan areas ($34,668 in 2004).