Pittsburgh received praise in 2012 for being among a handful of large and midsized cities that had recovered from the economic downturn, but PNC Financial Services Chief Economist Gus Faucher thinks the local economy will lag a bit in 2013.
“I think that we will see job growth of about 1 percent in 2013… But I think it’s going to be below the national average,” said Faucher. “I would expect that the U.S. job growth is going to be closer to around 1.5 percent in 2013.”
Pittsburgh’s economy relies heavily on the health and education sectors, which do not see the massive losses during an economic downturn but also do not see big growth when the economy begins to recover. Faucher said the region’s lack of population growth will also put a drag on the retail and service sectors, which will also keep job growth in southwestern Pennsylvania slow.
However, it’s not all bad news. The gas and energy industry is strong according to Faucher who said there is still a lot of drilling activity. “Prices are a little bit low right now so that has stalled some activity but I think the lure of inexpensive natural gas will continue to result in natural gas drilling activity.”
Faucher sees the new ethane cracker plant planned for Beaver County boosting jobs in the region but not until 2014 or beyond. Some construction jobs could be created as a result of prep work being done on the site in 2013.
The one wild card remaining in the coming year is the so-called fiscal cliff. Faucher said he does expect there to be some tax increases and spending cuts but he thinks congress and the president have enough incentives to get something done early in 2013. He also thinks they have enough tools to make sure the massive cuts and hikes do not immediately kick in when the calendar turns from December to January.