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Economic analyst: Western Pennsylvania region 'on a roll'

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By Adam Smeltz
Thursday, Jan. 9, 2014, 11:27 p.m.

More Western Pennsylvanians should find work in 2014 as the manufacturing, construction and related sectors gain speed in and around Pittsburgh, an economist predicted on Thursday.

“I think our region is still on a roll,” said Stuart Hoffman, a senior vice president at PNC Financial Services Group Inc. who joined two other executives at a Downtown luncheon to forecast more robust economic trends across the country. “I think this region is poised to fully participate the next couple years in national growth dynamics.”

PNC expects about 15,000 jobs to materialize this year in the seven-county Pittsburgh metropolitan area, where unemployment should fall from about 6.7 percent to about 6.2 percent, Hoffman said. Jobs should appear “pretty much across the board,” he added, including in the energy, engineering, retail and hospitality sectors.

The area added about 12,000 jobs in the first 11 months of 2013; figures for December were not yet available, Hoffman said.

He found more glimmers of hope in a “tremendous amount of construction projects” and projected home price increases of 2 percent to 3 percent over the next two years in Western Pennsylvania.

Home sales in the Pittsburgh region climbed to 21,070 in the first 11 months of 2013, up from 18,957 in the year-earlier period, according to the West Penn Multi-List agency.

“The problems in the real estate sector are largely behind us,” said James Glassman, a senior U.S. economist at J.P. Morgan Chase and another speaker at the luncheon and panel discussion.

The Pittsburgh chapter of the Association for Corporate Growth hosted the regular session in the Fairmont Pittsburgh, drawing about 150 lawyers, financial professionals and other business people.

Though Pittsburgh largely escaped the collapse of the housing market in 2006 and 2007, Glassman said, home prices nationally have recovered about half of their losses since then. A glut of housing over the past several years is easing and should help fuel a resurgence in construction, he added.

Overall gross domestic product should increase about 3 percent this year, topping the 1.8 percent and 2.2 percent growth rates in 2013 and 2012, respectively, said Bernie Schoenfeld, a vice president at BNY Mellon Wealth Management. The 2014 projection includes a 3.5 percent increase in industrial production.

“The U.S. is beginning to stabilize to accelerate in growth,” Schoenfeld said. He called the overall economic outlook “relatively favorable” but warned: “The stock market is probably overdue for a correction.”

Hoffman issued a separate caution: Disruption in the Middle East that increases oil prices could derail the bullish predictions.

Interest rates for 30-year fixed mortgages should increase from 3.99 percent in 2013 to 4.99 percent this year, according to PNC. The prime interest rate should remain steady at 3.25 percent, the PNC forecast shows.

“Ask yourself: What could be worse than what we went through the last couple years?” said Glassman, encouraging his audience to take a big-picture approach after the 2007-09 recession. “There's a lot of opportunity out there.”

Adam Smeltz is a Trib Total Media staff writer. Reach him at 412-380-5676 or Staff writer Sam Spatter contributed to this report.

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