Article Published: April 9, 2015
Article Published: April 9, 2015
The 10-county Pittsburgh region still has the right stuff when it comes to making things, according to the annual business investment scorecard released today by the Pittsburgh Regional Alliance (PRA), the region’s economic development marketing organization.
The scorecard shows that advanced manufacturing led five key industry sectors with 68 business attraction, expansion and retention projects in 2014, out of a total of 274 regional business investment deals, which included announced investment and real estate development projects.
Manufacturing Leads Region’s Key Sectors’ on 2014 “Business Investment Scorecard”
A legacy industry long associated with the Pittsburgh region, manufacturing was the leading sector for numbers of deals announced during 2014. It has been the most active sector in terms of deals for six of the last eight years that the PRA has compiled its annual scorecard, and is a sector – alongside energy – with deals that are in nearly every county of the region. This past year, manufacturing accounted for 68 announced projects, representing $450,234,500 in capital investment.
“Manufacturing’s performance is especially encouraging. That sector’s investment deals are creating and retaining high-wage jobs that support a robust supply chain throughout the Pittsburgh region. Our scorecard demonstrates the value of the diverse economy that’s been created in the Pittsburgh region over the past 25 years,” said PRA CEO Dennis Yablonsky.
“We see fluctuations from year to year in the sectors, but the performance of the regional economy as a whole has stayed consistent – delivering a seasonally adjusted unemployment rate of 5.2 percent in Feb. 2015, well below the national average. This year’s scorecard points to another balanced performance for the regional economy,” said Yablonsky.
$2.3 Billion in Capital Investment: “A Vote of Confidence in Pittsburgh Region”
Total capital investment totaled $2.3 billion – the eighth consecutive year investment in southwestern Pennsylvania exceeded $1 billion. “Capital investment is a vote of confidence in the future of a company and in the future of our region,” said Laura Karet, PRA chair and CEO of the multi-state, multi-format retailer Giant Eagle Inc. “Each of the 10 counties stands to benefit, as do the people employed today and those training for the jobs of the future across the region’s five key sectors.”
Where the Investment Money is Going: Locating and Expanding Facilities and New Real Estate Projects
The total $2.3 billion in capital outlay associated with the 274 regional projects of 2014 is tied to both investment and development projects. Investment projects accounted for $713 million in announced capital outlay related to property, plant and equipment improvements. Development projects – energy sector-related infrastructure and new brick-and-mortar additions for the region’s real estate landscape – totaled $1.6 billion, the third highest amount on record.
Expansions Dominate: Seven Out of Ten Deals Are Growth by Existing Businesses
In 2014, seven out of 10 deals involved the expansion/retention of existing companies.
“The expansion of existing businesses continues to be the backbone of the regional economy and accounts for the majority of announced deals, including in manufacturing where expansions accounted for 79 percent of all deals in that sector.
“Expansions as an economic driver are a scorecard trend, year over year. Because of that we are constantly working to make sure that existing businesses have what they need to expand here – from real estate to workforce. And we’re seeing results. Businesses who are already here are making repeat investments in this region,” said Yablonsky.
Hand in hand with business investment is employment impact. Deals announced in 2014 are anticipated to have a total job impact of more than 10,600: created and retained jobs
Scorecard is Only Comprehensive Snapshot of Pittsburgh Region Investment Activity
In cooperation with economic development partners from across southwestern Pennsylvania, the scorecard is compiled from announcements made during the prior year. The numbers of regional deals, per defined key sectors, announced during 2014 are:
Advanced Manufacturing: 68
Information and Communications Technology: 47
Energy/Natural Resources: 31*
Financial and Business Services: 28
Healthcare and Life Sciences: 24
Robust R&D Make Possible Manufacturing’s Endurance in Pittsburgh
Annually, more than $1 billion in academic R&D in the region, including at two, Tier One research universities – Carnegie Mellon University and the University of Pittsburgh – drives a culture of innovation. This is complemented by another $1 billion annually in corporate R&D and $1 billion in government R&D across the region.
“When our strength in regional manufacturing converges with high-value industries including IT/cybersecurity, medical devices and energy, we’re setting the stage for greater prosperity,” said Petra Mitchell, president and CEO of Pittsburgh-based Catalyst Connection, an economic development organization dedicated to helping small manufacturers in southwestern Pennsylvania improve their competitive performance.
“While today’s manufacturing requires fewer employees because of technological advances, the sector demands smarter, tech-savvy workers whose salaries are competitive and reflect the education and training that individuals bring to 21st century manufacturing operations,” said Mitchell.