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Business

Pittsburgh sets economic pace for region

| Friday, Nov. 5, 2004

Southwestern Pennsylvania needs to identify and nurture small businesses to help them along and set the stage for sustained regional growth to reverse anemic economic and demographic trends, local experts said Thursday.

Westmoreland County, along with the rest of the region, should be concerned about the fates of US Airways and the city of Pittsburgh, as failure by one or both would damage regional employment levels and the ability to attract new business.

"People tend to think it's a Pittsburgh problem. But Pittsburgh is a bellwether. It will set the stage for a lot of other communities," said Jerry Paytas, Ph.D., director of Carnegie Mellon University's Center for Economic Development. The research and policy center is an affiliate of Carnegie Mellon's H. John Heinz III School of Public Policy and Management.

Paytas spoke at Westmoreland County's third-annual economic development seminar, sponsored by the Westmoreland County Area Labor Management Committee at Westmoreland County Community College near Youngwood.

The city of Pittsburgh's finances are being scrutinized by a state-appointed oversight board, created by the General Assembly in February. Gov. Ed Rendell's administration appointed a separate recovery team after declaring Pittsburgh a distressed municipality under state Act 47 in December. US Airways, the nation's seventh-largest airline, filed for Chapter 11 bankruptcy protection in September.

Paytas said about two-thirds of municipalities in western Pennsylvania are spending money faster than revenue is growing.

"Why should Westmoreland County care what happens in Pittsburgh• You have people who work for companies in Pittsburgh, and companies here are customers of businesses in Pittsburgh," said Paytas.

Uncertainty over the fate of US Airways also stunts business growth and capital investment, said Larry J. Larese, executive director of the Westmoreland County Industrial Development Corp. "We know there will be (air) service, we just don't know who will provide it. Companies are not making decisions about expansions, based in part, on available services," he said.

Paytas said the recent expansion of LeedsWorld in Westmoreland County is a perfect example of progress. "The growth will come from finding small firms that will become big companies," he said.

In June, LeedsWorld announced plans to expand its plant in the Business & Research Park in Upper Burrell and Washington townships, a move that is expected to create 300 jobs. LeedsWorld operates in the promotional products industry. The company moved to Westmoreland County in 1988, employing 100 people. The expansion is expected to raise the employment level to 800.

Paytas said research shows that 69 percent of all businesses in the Pittsburgh Metropolitan Statistical Area -- which includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties -- have less than 20 workers and 84 percent have less than 500 workers.

Larese said Westmoreland County did sustain growth this year. He said the county's industrial development corporation sold or optioned almost 73 acres of industrial park property and leased 220,765 square feet of property. Larese said almost $100 million worth of highway funding projects are on the drawing board for fiscal year 2005.

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