Pittsburgh region's economy rebounding from pandemic more slowly than other metro areas

The Pittsburgh region has the slowest employment growth coming out of the pandemic among the nation’s 40 largest metropolitan areas, according to an analysis of Bureau of Labor Statistics data.

Pittsburgh’s labor force participation remains nearly 5% below what it was before the pandemic and is well below the U.S. average, where the labor force in March exceeded pre-pandemic levels, the data show.

Employment levels in Pittsburgh have stayed relatively flat since the fall of 2020, even as most other regions quickly grew.

Economists who spoke with the Tribune-Review said they think Pittsburgh’s older-than-average population might have resulted in more retirements here during the pandemic, with those positions difficult to replace.

The Allegheny Conference on Community Development added that it thought the region could face a continued slow economic rebound, unless issues around Pittsburgh’s shrinking population can be addressed.

Jim Futrell, vice president of market research and analysis at the Allegheny Conference, said roughly two-thirds of economic activity is tied to population changes.

“If you aren’t growing the population, you aren’t growing that demand for goods and services (that) leads to economic growth,” Futrell said.

The latest Census estimates show that the Pittsburgh metropolitan area lost 13,755 residents between July 2020 and July 2021.

The decennial census said the region showed marginal population growth between 2010 and 2020, but the growth lagged behind the country at large.

The Pittsburgh region led the nation in natural population decline between 2020 and 2021, with the region experiencing more deaths than births.

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Population decline predicted to continue

Linda Topoleski, vice president of talent strategy and programs at the Allegheny Conference, said the combination of Pittsburgh’s older population and the steady decline in the region’s high school enrollment since 2010 portend a precipitous population decline moving forward.

The demographic trends aren’t new, but the pandemic just exacerbated them, Topoleski said.

“The pandemic happened, and it accelerated everything,” she said. “That’s where the perfect storm hit.”

Pittsburgh managed to stave off population decline for years thanks to a significant net increase of immigrants.

But international migration to the United States plummeted after the pandemic began, and its growth since has been minuscule in Pittsburgh. The Pittsburgh metro area brought in a net increase of only about 800 immigrants between 2020 and 2021.

Futrell said immigration would be the easiest way to combat Pittsburgh’s population issues and help spur economic growth, but action must be taken at a federal level. There is little that local leaders can do to increase immigration to Pittsburgh, he said.

Until then, Topoleski said the Allegheny Conference is focused on a strategy to help attract domestic migrants to Pittsburgh and to help ensure that homegrown talent doesn’t leave.

3-pronged strategy

The Allegheny Conference believes the Pittsburgh region can take advantage of the growth it has seen in the tech sector and grow the population through a three-pronged strategy: attraction, retention and workforce development.

First, officials said, leaders should work to attract new workers and tech firms by marketing Pittsburgh’s virtues: relatively low housing costs, ample green space, its relative lack of traffic and congestion, and a friendly atmosphere for innovation.

Topoleski said Pittsburgh’s rate of retaining college graduates has been below the national average — about half of them leave. She said tech growth and other innovative industries could help convince more local graduates to stay.

She added that increasing workforce development efforts could help those without college degrees find work through free software and coding training, and help convince employers to hire more non-college graduates.

The Allegheny Conference hopes that a growing population could spur growth in some sectors that have seen the worst economic recovery, such as food service and accommodations sectors.

Futrell said food service employment has been growing steadily, but remains at only 75% of its pre-pandemic level. Accommodations employment is half what it was before the pandemic.

Topoleski added that companies are less likely now to fill positions that open up because of retirements, and workers are more likely to change jobs more often than in the past.

“We are not always replacing one-to-one,” Topoleski said. “The dynamics are different now, but we still need the people. We believe our (three-pronged strategy is) a solution, but it has to be done in a really amped-up way.”