Pittsburgh earns an overall grade of B+ with a composite score ranking it at the 58.5th percentile among 50 US metros. The city's economic character is most defined by its strong wage growth, with a year-over-year increase of 6.43%, and its labor force growth, which is expanding at a rate of 1.20% annually. These metrics suggest a city with a growing workforce and rising labor costs.
Labor Demand
Pittsburgh's employment growth rate is -0.61% year-over-year, and weekly hours are deviating -0.767% from the city's own 12-month baseline, resulting in a labor demand composite score of 3.45, which ranks below average at the 34th percentile. This combination signals a contraction in labor demand, indicating that the city is not adding jobs at a significant rate and hours are below trend. This scenario may lead to a surplus of workers, making it easier for businesses to hire.
Unemployment
The unemployment rate in Pittsburgh is 4.00%, ranking above average at the 66th percentile, indicating a relatively tight labor market. This means that there is less slack in the market, making it harder for businesses to hire, and potentially leading to upward pressure on wages. Businesses looking to hire in Pittsburgh may need to offer competitive salaries to attract top talent.
Wage Growth
Pittsburgh's year-over-year wage growth rate is 6.43%, ranking in the top tier at the 84th percentile, indicating fast-rising labor costs for employers. This strong wage growth is good for worker purchasing power, as employees will have more disposable income to spend on goods and services. However, it may pose a challenge for businesses looking to keep labor costs under control.
Cost of Living
Pittsburgh's cost of living, with a PSF of $171/sqft and average hourly earnings of $33.29/hr, resulting in a ratio of 5.14, ranks near the median at the 57th percentile. This means that the city is neither extremely affordable nor expensive relative to its peers. The fact that PSF is rising 3.0% year-over-year may make it less attractive for talent without wage premiums, as the cost of living is increasing.
Labor Force Growth
The civilian labor force in Pittsburgh is growing at a rate of 1.20% year-over-year, ranking in the top tier at the 82nd percentile, indicating an expanding workforce supply. This positive growth rate suggests that the city has a growing pool of potential employees, making it easier for businesses to hire and expand their operations.
Building Permits
The number of building permits in Pittsburgh is decreasing at a rate of -4.03% year-over-year, ranking near the median at the 48th percentile, indicating a tightening housing supply. This decline in building permits may signal future affordability challenges and limitations in accommodating a growing workforce, potentially making it harder for businesses to attract and retain talent.
Days on Market
The median days on market in Pittsburgh is 50 days, with a year-over-year increase of 6.4%, ranking above average at the 60th percentile. This means that homes are sitting on the market for a relatively longer period, making it a more accessible market for workers relocating to the city. However, this may also indicate a slowing market, which could have implications for the local economy.
Office Economy
Pittsburgh's professional and office worker share ranks near the median at the 44th percentile, indicating a moderate depth of talent in these sectors. This makes the city suitable for businesses that require a mix of professional and non-professional workers, but it may not be the best fit for companies that require a highly specialized or deep knowledge-economy talent pool.
In conclusion, Pittsburgh offers a growing workforce and strong wage growth, making it an attractive location for businesses looking to expand their operations. However, the city's tightening housing supply and rising cost of living may pose challenges for businesses looking to attract and retain talent, and this should be a key consideration for decision-makers evaluating Pittsburgh as a potential location.