Saturday, June 18, 2016

MiningPA update

Just a chance to update my graphic of mining and logging employment across Pennsylvania. Again this is a bit contrived and shows data for mining and logging employment in Pennsylvania net of that in the Pittsburgh MSA. It is an attempt to capture what is happening across the vast Pennsylvania T*.

To capture the impact of shale development across Pennsylvania I highlight the change in employment from a baseline I define as 2005 through the lastest data for May 2016.  Not really any slowdown in the collapse in this metric.  The trend has not retreated all the way back to the 2005 levels, but it sure is not far from it.  The thing I have pointed out is that there appears no soft landing here and it sure looks like it is going to very soon overshoot the employment level before there was any palpable shale development across the state.  At the rate this is going, this metric will fall below the 2005 baseline in July... which given the lag in when data is reported is now just around the corner. Will there be as much notice as there was of the employment gains earlier on?

The reason I argue the employment effect will be negative is natural gas' impact on coal mining. The vast expansion of natural gas has collapsed the price to the point that it has displaced a lot of the nation's demand for coal. Taken holistically, the employment impact of shale development in Pennsylvania is about to turn negative.. a conclusion any conceivable extrapolation of this time series leads you to:

* Note it is not Pennsylvania net of Pittsburgh and Philadelphia just because there is limited data easily available on mining and logging employment for the Philadelphia MSA, most likely because the scale of that employment in the Philadelphia is insufficient to report due to confidentiality suppression. But on the assumption mining employment in Philadelphia is low, or has low variance, the graphic fairly represents that is happening across Pennsylvania.

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Wednesday, June 15, 2016

Pittsburgh immigration data update

Same story, new year.  New data - or not so new data, just newly published - on international immigration was released from the US Department of Homeland Security earlier this month. Someone ought to notice. The trend for Pittsburgh in naturalizations, those becoming citizens, here can be updated to include 2014 data.  Bottom line: a very small tick up from 2013.  1,496 naturalizations occurred in Pittsburgh in 2014. Still, if you normalized on the size of the region Pittsburgh remains about as low as it gets in this statistic, much as it has been for decades. Naturalizations in Pittsburgh are noticeably below the level of Cleveland (1,942) and Cincinnati (1,691) and far less than half that of Columbus, Ohio (3,407) for just for a few nearby examples.

Also very different from national data, there has been virtually no new citizens naturalizing in Pittsburgh who were born in Mexico (a total of 29) no matter how many stories you read about the changing demographics of Beechview. As has been the trend, most naturalizations here come from Asia, which includes India. Granted this is data on naturalizations and it takes a long time to become a naturalized citizen. So sure, it could be that there will be a trend up in a decade, but that was the story from a decade and a half ago as well. Other than that I'll skip any more pseudo punditry and just post this for the pseudo record. Here is the trend and basic stats on naturalizations in Pittsburgh and some US data for comparison. 

US Pittsburgh MSA
Total 653,416 1,496
Europe 71,325 254
Asia and Oceania 236,562 871
Africa 62,175 166
Mexico 94,889 29
Other North America 127,658 97
South America 60,665 79
Unknown 142 -

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Monday, June 13, 2016

Pittsburgh real estate

Lots of real estate data to parse in Zillow's recent Negative Equity Report for the 1st quarter of 2016. Negative equity being defined as mortgage holders with homes worth less than the outstanding debt on their mortgage, something that can happen when the value of your home drops after you buy it..

Using Zillow's data, first take a look at this benchmarking of how metro areas compared 4 years ago.

Pittsburgh was that extreme stable case. We just didn't see the real estate price collapse that happened elsewhere. It really was a remarkable observation. There just was little notice of just how extreme we were for a whole bunch of years.  All the stories of real estate miasma elsewhere just was not a systematic issue here at all.  In part it reflects how little the prior real estate bust hit here, a fact all the more remarkable by how deep the real estate bust was just on the other end of Cleveburgh.

So today.. still true?  No, but...   National real estate prices are on a tear if you have not seen the news or the numbers lately.  But across metro areas some reversion to the mean was inevitable. So indeed Pittsburgh no longer has the lowest % of homes with negative equity, but we remain far closer to the low end than the high. Still, note how dramatically the negative equity rate has dropped in some of the formerly worst-off areas.

It's not that Pittsburgh, the metro area, has not seen similar declines, but when you start out so low you just can't drop anywhere near as much. Still a positive trend for Pittsburgh, with the negative equity rate dropping from 16.7% to 9.2% over 4 years.  Also note these are metro numbers.. If you look at Zillow's county level data, Allegheny County is coming in with the lowest negative equity rate across the metro region at just 7.5%, well below their national average of 12.5%.

In the end as every knows for real estate it is location, location, location, and by that it means micro-location.  Averages are usually not really that helpful at saying what your house is worth.  Still if you want to tell the whole Pittsburgh story in a nutshell... ponder just one data point. For those of us born in Lawrenceville, real estate prices like this are pure cognitive dissonance.  Didn't click the link? The price history for that typical Lawrenceville 2x2 was sold for $25K in 1983 (somebody probably paid way too much), $60K late in in 2013 and now on the market for $395K. The current asking price is a bit incongruous with the current assessed value for that property, literally less than 1/6th the current asking price. That has to be some sort of record. No comment at all on the prices of places like this.

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Wednesday, June 08, 2016

Bringing back manufacturing to Pittsburgh

For sure the news of a new ethane cracker is relatively big economic news for the greater Pittsburgh regiona topic unto itself for another day maybe. Still it is hard to separate out conjecture from current reality. That comes to mind reading this from the WSJ (and he of true McKeesport roots my friend @timpuko - Hi Tim) which has this:

Ohio Valley Lures Manufacturers With Rock-Bottom Natural Gas Prices 

Here is the unavoidable truth. Maybe the ethane cracker will spur some future growth in manufacturing for Pittsburgh; I am sure that will be a topic here or for other economic pundits for sure. But that is not the current impact. If you date the beginning of shale gas development to 2008, the trend in local manufacturing employment has only been down since then. Down in absolute numbers, down as a proportion of all regional employment and down compared to national trends. Using BLS data on Pittsburgh MSA manufacturing and total nonfarm jobs I did the division - but feel free to do it yourself - to come up with a metric of manufacturing jobs as a percentage of all nonfarm jobs in Pittsburgh.

I've posted the comparable graph of absolute numbers of Pittsburgh manufacturing jobs in the past, but if you just want a few factoids to reference.  There were still over 100K manufacturing jobs across the Pittsburgh MSA as late as August 2007, around the time shale development was really taking off.  The latest April 2016 data is an employment count of 85,300.  For purely historical reference, my own research says that the all time peak manufacturing employment in the Pittsburgh metropolitan region (then defined as 4 counties for precision) was over 379 thousand at work in the plants in October 1952. An existential economic factoid defining Pittsburgh and a hard intergenerational memory to forget for many. It was also a remarkable  ~40% of all employment in the region.

You just feel that some think this one project, albeit bigespecially when you ponder the
construction activity that will come and then gowill bring back that past. But ponder the scale of the numbers.  Maybe 600 jobs on the site when in operation. Pick some inconceivably large multiplier of indirect jobs it will create... 6 is huge multiplier by all known standards.  Mulitply about and get 3,600 jobs which is less than 1% of that past peak. Multiply that number by another 5 (so a multiplier of 30???) you get around 16K jobs which is just enough to bring the Pittsburgh manufacturing count to where it was in 2007not exactly an era of manufacturing renaissance here. And that is assuming there are no further losses of manufacturing jobs locally after April.

What is even more important is that the regional trend has all been down while, in fact the national story is quite the opposite over the last 8 years.  National manufacturing employment has generally been going up since 2010. So we need several thousand additional net new manufacturing jobs in Pittsburgh just to maintain pace with national growth rates in recent years.

One small point on the ethane cracker and the reported numbers that employment at the site will be up to 600 jobs. Keep in mind that the Horseheads inc plant that recently departed the site, itself. had ~500 jobs near the end of its time here, so on net this is mostly a wash. But on shale related jobs that can be generated indirectly here. Once there was a belief there would be this vast demand for tubular steel. Whatever tubular steel bubble that came to pass here, it passed quickly. Yes, I do think there are other indirect jobs generated by the shale development across the Pittsburgh region and its environs, but I bet the bulk of those jobs are not in manufacturing at all, but spread across a wide range of service sector (the service sector writ large - to include finance, legal and hospitality sectors) jobs.

I leave you with what remains one of the most remarkable videos explaining how drilling was here to save Pittsburgh from itself. The viewer is left to connect the dots between the latest cupcakery in Regent Square and hipster barber (in Lawrenceville I think... a city Neighborhood where fracking is still banned by ordinance I do believe) and shale development elsewhere.  I wonder what videos would have been made if the drilling planned for Lawrenceville itself - one of the densest parts of the entire region - ever happened.

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Tuesday, June 07, 2016

Pittsburgh: A tale of two cracker plants

This may be the ultimate Pittsburgh economy Rorschach test.  Which Pittsburgh Cracker plant  and yes they both are cracker plants  are you?

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Monday, June 06, 2016

Commuting Pittsburgh

This could be a book unto itself, but kudos to the data project by Mark Evans. See:  

ACS Commuter Data Visualizations at

You can see a visualization of tract to tract commuting data for any county in the nation.  I will just use this as an excuse to microscopically increment my own tech skills these days and figure out how to make an animated gif easily.  Using the tool check out the daily commuting patterns for Butler County, PA, and in particular the big mass of folks who come down to work in Pittsburgh every day. Let's see if this works:

If you want to see some previous analysis of commuting patterns specific to the City of Pittsburgh, I have that, albeit in a far more static format here. What I saw there is reinforced by the graphic of commuting for Allegheny County.  Check out what appears to be the largest green data point which looks like it moved down the Allegheny River.  I am pretty sure that is singularly the commuting of residents of Fox Chapel to Downtown Pittsburgh daily.

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Friday, May 20, 2016

Pennsylvania jobs frackageddon

Just a quick update, adding in the April jobs data just out, of a graphic I put together last month focusing on the fate of mining jobs in Pennsylvania. Again this is a bit contrived in that I subtract out what is happening in Pittsburgh so as to get at what is happening across central Pennsylvania.

In short the jobs Frackageddon continues across most of Pennsylvania. It is not as fast a loss in the Pittsburgh data I excluded here for the record, but elsewhere in Pennsylvania things are now beyond dire.  In fact the net loss in mining jobs between March and April (-900) is actually the single biggest month over month job loss I calculate anywhere in the time series.  So the job loss is accelerating.  I am amazed because, as you see in the graphic, the loss of these jobs is already down 85% from peak back to a pre-shale baseline. You would have thought that after the bulk of the jobs had gone, the loss would begin to slow down, which is not the case here.  It reinforces what I said in the earlier post that in the end it will not just be the shale jobs that go away, but the coal jobs the shale boom eviscerated. If true, we are heading down to a new baseline that is lower than where we started.

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Thursday, May 19, 2016

Latest city population data

ICYMI, population estimates just out for the city of Pittsburgh show a decline between 2014 and 2015 of 1,374*.  If true it represents the biggest annual population loss in almost a decade (since between 2006 and 2007 to be precise). I think Edward Tufte might take issue with the PG's accompanying illustration of the data, so here are a couple other breakdowns of the number.

First is just an update of graphic I have put up in the past showing the evolution of the time series of Census estimates for the city over time.

So basically a recent peak in the middle of 2013.  If you are curious what showed a more rapid jump in the city's population earlier this decade, I have gone into that in the past in more detail here, but the short version was there were some errors in reporting of the population of a single dormitory-like residence with a large number of college students.  But it was just an error, though it was quite a headline at the time when the city's population trend first showed a positive number. Turned out, coincidentially, or luckily, to be true in the following years, but it was not true at the time.

What may be more useful is a time series of annual change in the city's population over the last decade or so.  That looks like this:

Going back even earlier, net annual losses in that 3-4K range were pretty typical going back a frightfully long time, but from around 2004 to 2013 you see a solid trend moving positive.  Hard to continue it though and for now a qualitative break to the downside over the last 2-3 years.  True, a lot of caveats with this particular data, so we will see going forward.

*PG article current says the annual loss is 1,313, but my subtraction shows the loss is 1,374??

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Wednesday, May 18, 2016

How Fracking brought Abba back to Pittsburgh

What is the most important economic news you will not read elsewhere? For Pittsburgh that is. Check out the ship that might just save Pittsburgh:

The news is that the World's Largest Liquefied Ethylene Carrier is now under construction in China. Check out the impressive Navigator Aurora which now appears to be underway and scheduled to be delivered to its new owner in London later this month. Obscure news mentioned only here, on an obscure and barely read blog? Maybe.  Turns out it might be the single most important news impacting Pittsburgh into the future. The new ship is purpose-built to transport liquefied ethylene gas over the ocean. Ethylene is widely used across the chemical industry and is produced from natural gas, something the US is finding itself in greater and greater surplus.

All should know by now that natural gas prices have collapsed as a result of that growing surplus. Prices of natural gas produced in Pennsylvania has dropped even further below market prices elsewhere in the US.  With that price collapse the employment across Pennsylvania in all things shale has collapsed even further.  Personally I expect that by the time the fall comes, there will be little room left to store the natural gas being produced in the United States, and at least spot prices will enter a unpredictable twilight zone. So things look bad for all those predictions of any local, regional or statewide economic boom powered by shale gas development.

But there is one big hope for natural gas markets in the future.  Last month, the first export of natural gas left the east coast for European customers. Some believe that ever more exports could drive up demand for shale gas, and by backstopping market prices will refuel the shale boom once envisioned. Whether exports will ever be big enough to have the effect some want, and what greater US exports will mean to prices worldwide, is a topic for another day. But if there is any hope for that scenario, ships like the Navigator Aurora will be its catalyst.

Here is the real interesting point. The new ship is not going to be a new free-agent looking for clients in the growing worldwide market for ethane/ethylene. It is being bought under what I presume is a long term contract to bring natural gas solely from the US East Coast to a single ethylene cracker owned by the Borealis company in the Stenungsund, Sweden. I have to believe that the investment in the ship and plans for supplying the cracker plant in Stenuncsund would all not have gone forward if there were not some very long term contracts in place to supply what is probably Marcellus Shale-produced natural gas for export.  So yes, the land of Abba (that would be the Styx of Scandinavia for the record) is likely to be a bigger consumer of shale-gas than Pittsburgh (writ large) is for some years to come.

Yes, maybe, maybe, in a decade at a minimum, a similar ethylene cracker might start up in Beaver County, but for a long time there at least there will be fare more ethane being consumed in Sweeden than. The extensive agglomeration of chemical industries around Stenungsund may already be greater than what remains of what once once a far more extensive chemical industry cluster in Pittsburgh.  Even if the Beaver County plant proceeds at full steam, it will be decades before there Pittsburgh rebuilds anything like the cluster of chemical industries there. Will natural gas and ethane markets in a quarter century resemble anything like what they are today? I wonder.

But the ironic punch line of it all.  Even as shale-gas induced employment in Pennsylvania collapses, there are certainly jobs at shipyards in Shanghai, ship brokers in London, and blue collar workers across Scandinavia looking to benefit far more over the coming decade or longer from the shale boom around us. I read something about the world being flat and all.

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Sunday, May 15, 2016

Um, building permits in the city of Pittsburgh anyone?

I know things are quiescent here, but somebody out there ought to have noticed this.  I'll skip the preamble and go right to the bottom line (up front, as it were). Check out the latest data point in this annual time series total units in residential building permits for the City of Pittsburgh.

Let that last # sink in for a minute. If correct then there is big news in that little spike for 2015? That or at least a sign the local hagiography industry is sputtering? More than that, it is potentially quite a historic number. Why? The bulk of that number comes from 9 potential buildings with 100+ units each on average, something that has likely not been planned within the city for an undetermined period of time.  I will hazard a presumption that residential building permits were not exactly jumping off the charts through the 70s and 80s - a period when the city's population was dropping pretty rapidly - you might have to go back several decades at least to find a comparable level of new (potential) residential construction.

It is one of those metrics that means more or less than may seem obvious.  This all is from data collected by the Census Bureau on residential construction permits, so theoretically a great leading indicator of construction activity in the near future. The huge spike in building permits issued in 2015 could be indicative of a lot of new units coming online soon, and possibly of a population spike (spike-let? if that is a word) to fill said units.   If you look back over the last 20 years, the next two largest numbers (367 in 1999 and 641 in 2002) each reflected notable events in Pittsburgh real estate history. One is likely for plans for the initial Summerset development and the earlier Downtown residential units that boomed in the new century, respectively.

OK, deep breath.

One huge caveat (yes all real data has caveats, live with it) that may at the very least make the spike less extreme in context than it appears..  This data is self-reported by individual municipalities, so it really just reflects data the city of Pittsburgh sends to the Census folks each year. The data has a breakdown of building permits issued by size of structure and also the total estimated construction value.  I have pointed out in the past the curious anomaly that the data for the city of Pittsburgh showed zero new building permits for multi-unit buildings with 4 or more units for any year between 2005 and 2013.  Since casual observation can come up with examples to dispute those zero values, so you have to assume something was amiss in the data itself. I think the city kind of missed reporting building permits on larger construction for many years, even though the data should have been included..  I also think that datum of 100 for 2013 is revised and a bit to round for me - wortth checking,  You can read some of my musings on this issue in this old post here. Others have opined that the building permits in the city also not reflect renovation activity leading to new habitable residential units as well. So some of the past data may not be as low as it appears, but it is hard to imagine the reality gets close to that 2015 data no matter.

So take it all, like all extreme data points, with a grain of salt, but still at the end of the day it is hard to miss that 2015 is a big number compared to any year in the past. Even if all those units don't actually get built, is the filing of so much construction activity an economic metric of note for the city unto itself?

See, I didn't make you read all the way to the end to get to the punch line. There is a secret question however?  Why was I even looking at this data this week?

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Sunday, April 24, 2016

A Frack in the Pan

With the Pennsylvania Senate race, and a lot of Pennsylvania politics in general, still revolving around the question of whether fracking should be promoted, banned, encouraged or tolerated, a more fundamental economic question is left untouched. What is the current state of fracking in Pennsylvania? The market may have more than determined what politics implies is still an active question. The news has belatedly caught up to the decline in fracking across Pennsylvania, but the meme seems to be it's all a temporary setback. Everyone seems to be skipping over some more structural changes taking place in the industry.  There may not be much need to debate the future of fracking much longer, at least in Pennsylvania.

Will fracking come back is quite a hypothetical for the long run. Closer to the here and now is a much starker reality. The issue is no longer whether fracking related economic growth (and the jobs that go along with it) has reversed, but by how much and how far and what are the 2nd order effects of the rapid boom and bust. My question that goes a bit further. In the long run, will the development of fracking across Pennsylvania lead to net job destruction in the long run? Yes, the question isn't how many jobs will be created by fracking. Will fracking lead to a net loss of jobs.

Heresy? Certainly for an economic boom most claimed would last, at a minimum, for decades if not longer. Remember the, long since overcome by events, economic impact studies of Marcellus Shale in Pennsylvania. These studies were promised to be repeated annually so we could track the changes taking place. Yet, after just a couple of these studies, and long before the projected gains were ever realized in actual data, the studies were mysteriously put out to pasture, never to be repeated.

Debates over the scale of gains is one thing, but a net job loss is another matter altogether? Not just a wild projection of mine. Here is a graphic I admit I contrived, but gets to the core trends in shale development in Pennsylvania. Employment trends for Pennsylvania are reported for the Mining and Logging industries. Granted logging exists in Pennsylvania, but the variations in tat time series is all about natural gas and shale development in particular. Southwestern Pennsylvania, to include the Pittsburgh MSA, has had a longer boom in shale development for a number of reasons. The newer development of Utica Shale centered in eastern Ohio has provided additional gains. In the core of Pennsylvania where the Marcellus Shale was first developed at scale, the trend is pretty stark. My annotated graph below is of mining and logging employment in Pennsylvania net of the trends for the Pittsburgh MSA. Take a look:

Hard to look at that graphic and read the projections, or hope, the industry has of a turnaround by next year. Even if the industry stabilized, will the jobs come back?

The punch line. Mining and logging employment spiked by ~100% between 2005 and a peak in early 20112 The base of employment prior to 2005 includes mostly coal mining which is also included in this time series, but the changes since then have mostly been due to the trends in natural gas development. Explosively employment growth occurred from 2009 through 2012, but then went flat and since 2015have been falling precipitously. As of March 2016, the drop thus far means that over 78% of the gains between 2005 and 2013 have already evaporated. Here is the bigger observation of the data: the employment drop does not appear to be abating. If the drop continues at the rate it is going until July of this year, the state's employment in mining and logging will drop below the 2005 average.

Surprising? Not if you consider what the 2nd order impacts of the shale revolution, as it were, has had across the energy panoply. Coal in particular, no matter what you think about the impact of regulations, has seen its market share impacted directly by the rapid expansion of inexpensive natural gas.

An unaddressed news story is what happened to all the workforce development programs across the state that raced frantically to get workers into these shale jobs. Did all, or any, of that make sense and how many of those newly trained workers ever found employment in the industry, let alone how many remain employed.

For those expecting a turnaround, coal production can't expect much gains as long as natural gas remains anywhere near as cheap as it is now. As coal mines close, many will wind up being closed permanently.  Add into it news from the last week that Consol closed its decades old research activity in Pittsburgh, you have to speculate that much of the region's coal employment will be forever eviscerated as a result of new natural gas already in the (proverbial) pipeline.  In the end, add up the loss of virtuall all natural gas job gains, and ever more coal job losses, the overall size of employment in the energy complex in Pennsylvania could very conceivably wind up smaller than it was before the shale revolution began. The unavoidable law of unintended consequences strikes again.

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Monday, April 18, 2016

Parsing Pennsylvania's Primary (or Nate Silver N'at)

Honestly this is mostly a post to prove I can still make a map.  But with the New York primary almost underway, all eyes will focus on the Pennsylvania primary. Much as they did 8 years ago; for at least a week that is.  Lots of talk of new voters registering this cycle, or voters switching registration to vote for one candidate or another.  How big a deal is either the party switching, or new registrations, in Pennsylvania?  The office of the Pennsylvania Secretary of State puts out lots of information to feed your inner Nate Silver.  Here is my take.

One topic I've seen alluded to is straight up party switching among people already registered.  This matters for Pennsylvania's closed primary. This is a map I concocted of the ratio of voters switching into the Republican and Democratic parties cumulatively since the beginning of 2016 (through April 3, and note the deadline to register for the primary election was March 28). 

It does give a fairly stark picture of switching into the Republican party.  Even Allegheny County has more folks switching to R than D, despite the large excess of registered D's there. 

That may be a bit misleading if inferred to be a new phenomenon.  Among already registered voters, party switching typical has this pattern or more switching to R than to D.  Yet how is it Pennsylvania has roughly million more registered Democrats than Republicans, a gap that is expanding over the years, not contracting?  The map above is only reflecting data of party switching among ready-registered voters who changed their party from something else to Democratic or from something else to Republican.   A similar map showing the ratio of new registrations is below. This depicts the ratio of new registrations as Democrats as percentage of total (note the total is among those registering as D or R, so not reflecting registrations other parties, or to no party.)

That gets closer to both the current political landscape of the state, and trends for the future.  Despite the first map showing a lot more re-registrations to Republican, the overall ratio of registrations over the same period is majority Democratic.  While there is a lot of Red in this map, the most populat counties in the state are pretty much all blue.

Make of it what you want.  Talk of Reagan Democrats and silent majorities I leave to the purely political pundits.  The total number of party switching into a major party (D or R, the first map) added up to under 75 thousand voters this year.  For a state with with over 8 million registered voters, you are really talking ~1%, much of which you would have expected no matter who was running this year.  Maybe this does not capture trends late in 2015, but I doubt it would make much of a difference.

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Sunday, February 07, 2016

The hanging indent

I owe my editor this. Now available and apologies for the price, but something you might want to mention to your favorite librarian to acquire.  From Routledge:  Routledge Handbook of Technology and Policy.

Chapter 9, which probably talks a lot more about Pittsburgh than it ought to, may be of interest to some who find their way here: The Role of Universities in the Evolution of Technology-Based Economic Development Policies in the United States, by Christopher Briem and Vijai Singh. 

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Wednesday, February 03, 2016

low prices, lower unemployment and signing off (for now)

We interrupt the static noise this blog has become. I even had to reset my password to log back in. 

But this little snippet of economic news sure seems so under-reported from my scan of what is going on. Anyone notice this recent story from the AP: Natural gas income from Pennsylvania forests takes big fall. How big? The story says Pennsylvania's revenue from leasing gas rights in state forests is down by half over just the recent year. That is just the beginning of the story. Note that the recent time period the story references is July through December 2015. Average natural gas prices have dropped significantly further since then. Consider the collapse in natural gas prices this week (hey, who wrote that article?) alone. Here is a headline from yesterday: Natural gas prices plunge below $2 on forecasts for warmer weather 

Natural gas price trends are worse for Pennsylvania producers.  The current realized price of natural gas in Pennsylvania is far cheaper than the benchmark prices quoted in business news. There is just too much gas here, and too few pipelines to get gas to where  markets what it to be.  Pennsylvania produced natural gas has not been above $2/MMBtu in some time, really not above $1.5MMBtu even.  Take that altogether, and given recent price trends, could future royalty payments to the state of Pennsylvania drop to literally zero?

Who cares about revenue from forests right?  The bigger question is what is happening to royalty payments for others. If royalty payments are dropping for the state of Pennsylvania, which one would hope negotiated relatively favorable contracts, what is happening to royalty payments to the average Pennsylvania landowner who sold their gas rights? How low have those income streams dropped and how is that impacting communities across the state. Then there is this related question of other revenue for other government entities which have sold gas rights on public land?

(update Feb 6. Trib looks at some of this: Slowdowns in oil, gas industries mean smaller checks for landowners  and then on Feb 10 see KDKA: Businesses Seeing Major Slowdown In Marcellus Shale Drilling Areas.  More to follow??)

Looking ahead there is a bigger issue out there.   If natural gas prices are so low right now in the middle of winter what will happen later in the year? Natural gas in storage across the country will peak about 10 months from now and there is a real issue out there is there will be sufficient storage for all the gas being produced. Remember also that storage is not likely to have a lot of next expansion given the new regulations being proposed in response to the massive gas leak in California. Mark my words, there will be a while new paradigm for gas markets come October when there may not be enough storage space for all the natural gas in the United States.Could we ever get to a point where natural gas prices in Pennsylvania go negative? Certainly no more inconceivable than negative interest rates which are becoming ever more common. Negative prices are even something that has almost happened in some North American oil markets.(that number has since been corrected to be marginally positive, but not by much)

And just a curious lack of news coverage on this other bit of economic news. This week one headline was that the Unemployment rate in the Pittsburgh region is down to 4.8. What is actually more interesting in the very same data, and even in the very same press release, is that the estimate for unemployment rate among CITY of Pittsburgh residents has dropped down to 3.8%, which is pretty amazing for an urban core city. If that statistic does not strike you as interesting, take a second to look at a brief discussion of what is considered full employment in the United States. Still, the city's unemployment rate was  not mentioned at all in the stories I see.  Just for comparison, what is the unemployment rate in the CITY of Detroit? Almost 3 times higher than in the city of Pittsburgh at 10.9% as of December 2015. Here is a related question...  How many urban core cities have significantly lower unemployment rates than the regions that surround them? See if anyone follows that thread.

Add those two stories together and what do you get?  Lots of talk of how local economic growth has been driven by shale gas development. True for sure, but to what degree? Note that natural gas production in Pennsylvania peaked last June, but it has not had that much impact on local unemployment rates. Go figure.

That's it. I do have one other pro-forma post after this, but that will be it for a while. At best little new content will be here until the very end of the year or possibly 2017.  For those checking in, thanks and take care. Didn't have time to do this earlier, so I thought I would formally Sign off (note this link will not mean much to anyone under 30 40, i.e. those who grew up on terrestrial TV)

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Wednesday, July 22, 2015

The unspeakable merger of Pittsburgh and Wilkinsburg

It looks like talks are ongoing about a possible merger (annexation?) of Wilkinsburg school district into the Pittsburgh School district.  Actually, the talk is more about whether the Wilkinsburg students will attend schools in Pittsburgh. Actually getting rid of the school district is a more difficult matter. School districts are distinct political entities, but would it make sense for the two districts to continue to exist long into the future if the student transfer lasted for long into the future? It begs other questions about what the future is of any future consolidation of municipal services between the City of Pittsburgh and the Borough of Wilkinsburg?  Remember the city of Pittsburgh already provides garbage collection and fire services to Wilkinsburg.

What if..  yes, what if... Wilkinsburg merges with the City of Pittsburgh?

Unthinkable?  Disruptive? If the city of Pittsburgh (2014 population estimate = 305,705) merges with the Borough of Wilkinsburg (population 15,930) then the 'new' City of Pittsburgh with a population of 321,635 will move from being the 62nd largest city in the United States to become the....  55th largest city.  OMG. Too much change to think about.  Soon who knows? Pittsburgh will merge with Fox Chapel and then who knows what will happen next?

One thing I can almost guarantee if any solid merger were to become possible.. the adjustment to Wilkinsburg's incredibly high property tax rates will be capitalized into real estate values pretty quickly.  In other words...  the potential land speculation in Wilkinsburg will have already started. .

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Tuesday, July 21, 2015

Veterans in Pittsburgh

With the president in town addressing the VFW convention here, here is the most recent factoid on the population of veterans in the Pittsburgh region:

Period of Military Service of civilian veterans age 18 and older
Pittsburgh MSA, 2013

Gulf War (9/2001 or later), no Gulf War (8/1990 to 8/2001), no Vietnam Era
Gulf War (9/2001 or later) and Gulf War (8/1990 to 8/2001), no Vietnam Era 5,106
Gulf War (9/2001 or later), and Gulf War (8/1990 to 8/2001), and Vietnam Era 569
Gulf War (8/1990 to 8/2001), no Vietnam Era 15,459
Gulf War (8/1990 to 8/2001) and Vietnam Era 1,198
Vietnam Era, no Korean War, no World War II 60,019
Vietnam Era and Korean War, no World War II 291
Vietnam Era and Korean War and World War II 271
Korean War, no Vietnam Era, no World War II 21,631
Korean War and World War II, no Vietnam Era 1,078
World War II, no Korean War, no Vietnam Era 15,806
Between Gulf War and Vietnam Era only 22,456
Between Vietnam Era and Korean War only 20,695
Between Korean War and World War II only 1,576
Pre-World War II only 67

Compiled from American Community Survey 2013 1-year estimates

Earlier I looked in more detail at the trend in the number of Post 9/11 era veterans in Pittsburgh.

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Monday, July 20, 2015

Parsing data on H1B Visa's

If you ever wanted to parse H1B Visa data, there is no need.  It's been done. See: What will America pay for H1-B Jobs? by Nilesh Jethwa... on the Data Science Central blog.  The post looks like it was from a while ago but was tweeted about today and I've never seen that data parsed in detail before. Now I know where to direct questions I get on that.

Note the interactive US Map he has there among other infographics.  You may note that it shows 550 approved H1B Visa's for Allegheny County in 2013, which may seem like a lot, but there are are 2,200 for Oakland County, Michigan and around 11,700 for the combined Dallas and Collin Counties of Texas.  Allegheny County does have more than say Cuyahoga County (Cleveland), with 379 and Hamilton County, OH (Cincinnati) with 345.

Also, there is little spillover beyond the urban core here is what my eyeball says.  Beaver County here, for example, is showing one (1) approved H1B Visa.  I guess to be complete, the site lists this for the counties in the MSA:

Allegheny - 550
Armstrong - No data
Beaver - 1
Butler - 25
Fayette - 8
Washington - 160
Westmoreland - 12

Personally I wonder what some of these numbers would have looked like, or similar professional worker immigration stats looked like, before Westinghouse demerged in the 1990s.

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Wednesday, July 15, 2015


The Department of Commerce has updated 2014 data on international exports at the MSA level.  They have a concise infographic of most of the summary data for international exports from Pittsburgh here.

But I was looking at some of the detailed data over the last few years and the headline seems to be that Pittsburgh is seeing a rapid drop in its international exports in recent years and 2014 is the third consecutive annual drop in the value of total international exports originating in Pittsburgh. Here is the trend I see:

Not much notice I see of the 30+% drop in value since 2011 and in particular the big drop between 2012 and 2013 which was in last year's data. The two biggest exports we have?  Industries labeled 'Primary metals' and 'mining (except oil and gas)', which translates to steel and coal. Probably more of the specialty steel in the export numbers I bet, but still.  The drop in exports looks like it is all related to mining and thus declining coal exports since 2011/2012... and it had been increasing mining exports that is also singularly responsible for the big run up in exports between 2009 and 2011.  I think mining is actually responsible for most of the volatility in this time series in general.  

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Tuesday, July 14, 2015

The exceptional tenure of Pittsburghers

While I take note of an interesting article (h/t @BurghDiaspora) from a Tulane geographer explaining that most perceptions of regional exceptionalism are misconstrued.  See: The Seduction of Exceptionalism, which is a great read, especially for Pittsburghers. However, like Freud said: The paranoid is never entirely mistaken, so sometimes there is truth in uniqueness.   So it goes in Pittsburgh at least with this.

I was inspired by this metropolitan benchmarking out of Philadelphia from BillyPenn: Parochial Philly: Is the city too hostile to ‘outsiders’, and does that hold us back?  Also a great read for Pittsburghers.  Their datapoint is a benchmarking of how many local residents live in their current state of residence.  Note their benchmarking shows Pittsburgh a more extreme case than Philly to begin with.   But I threw out there a comment that Pittsburgh is always the worst in this type of metric, and then realized I had not actually calculated that in some time... so maybe it was no longer the case.  I felt obliged to check.  

A more common benchmarking over the years is much more about very local geographic mobility, or lack thereof.  There is typically a question in official surveys (like the ACS) asking how long a householder has lived in their current place of residence.  Literally how long they have resided at their current addresss.  From that answer you can compute the size of the population broken down by tenure of the householder. If you do a breakdown of the size of the population whose householder has lived in their current housing unit in the oldest category it has long worked out that Pittsburgh always comes out on top. i.e.  we have a lot of folks who have lived in their current homes a long time, more so than what is typical elsewhere.

Has that changed? 'New' Pittsburgh and all?  Looks like it has not even budged much for the metro benchmarking. Here is what I get for the most recent data I like to use which is the 5 year ACS data.

How much does that graphic explain everything else here?

Yes, I suspect this is one of those metrics heavily impacted by age, but it is more than that. And note that age demographics impacts Pittsburgh far differently than say 'old' regions of Florida where many residents have moved upon retirement. For Pittsburgh aging is very much an aging in place phenomenon.  So you see not only that we are the extreme region in this calculation and the comparison among large metros, albeit it is a bit of a contrived metric.. but we are a big jump above #2.  Beyond the sheer older age demographic still in the region, there is this issue of housing price trends over recent decades.  The Pittsburgh region, lacking much equity appreciation in real estate, probably trapped more householders in their current residence as compared to so many other places where value was gained as housing prices went up.  Lacking that equity, it probably was harder to move into newer housing, even as household situations changed over a lifetime. That is my hypothesis at least, but I'd be glad to argue its veracity with anyone who thinks otherwise.

Anyone want to do the same benchmarking/calculation for the city?

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Monday, July 13, 2015

How I learned to stop worrying and love Downtown retail

As I type there are almost 200 comments on the PG's coverage of Downtown Macy's store to close. Basically, the closings of the Macy's location (née Kaufmann's) is some sort of emotional touchstone for all things Pittsburgh. That scale of commentariat borders on the kvetching you might get on the sports desk. Maybe it is because so many of us stared into those Christmas decorated windows.

Back when poor old Lazarus closed, after a very brief tenure in Downtown Pittsburgh, it was hard to wade through the angst it caused. People talked as if the failure of a failed investment was somehow a sign of doom for all things Downtown. If I had an oped to say on all this today, it would be close to a verbatim repeat of this from some years ago: Is Downtown dead? Hardly.  

If you want something more current, or at least more quantitative, see my post from a couple years ago digging into what is happening in Downtown employment trends.I'll summarize by pointing out that the number of jobs located downtown today is almost identical to what it was 50 years ago, or 20 years ago.. but there is a big change in the composition of those jobs. As time as gone by the retail jobs in downtown has clearly gone down as institutions like Gimbles, Grants, Hornes, Buyers' Mart, briefly Lazarus and Lord and Taylor, Saks, Ralphs, and now Kaufmann's/Macy's have departed or are about to be gone. Most all of those stores were pretty sizable job centers unto themselves.

So if the total number of jobs has remained even roughly the same, then other jobs must be growing. Now realize that retail jobs are not very well paying, and the jobs that have been growing Downtown clearly have been better paying. Thus that big jump in average pay per job located Downtown that I detailed in that post.

Obligatory to mention of course the vast Fifth and Forbes imbroglio that was a touchstone far beyond this.  I really wonder if there was not such an emotional pull to save the hat store and the wig store in the demolition footprint, if the history might have turned out differently.  Those shows, or maybe even the new stores that could have replaced them, might have soon found themselves in the footprint of a new skyscraper getting closer to completion right now.  I wonder how many of the 120 or so businesses that everyone fought so hard to save, are around today? The idea was that Fifth and Forbes should be replaced by smaller scale initiatives in the corridor and keep the buildings individually owned. How did that work out?

Still, Downtown retail really is one of those things virtually everyone seems obliged to 'save'. See this from a few years ago: Mayor's roundtable to beef up Downtown retail district. Just one of innumerable commissions we hear about, but rarely see much follow up on.  If the question is jobs.. jobs uber alles right? then remember that there really is no jobs gain from any shift in local retail activity. It is all displacement from an ever declining pie.

And if you really care about figuring out what is happening in Downtown retail.. maybe it is time to repeat a study once completed long ago (or just yesterday in Pittsburgh time) by my friend Jim: Who shops Downtown and why?  Probably won't happen.  Easier to kvetch.

as an addendum or cheat sheet...  You either know about Ralph's or you don't. If you are old enough you know about W T Grant.  But Buyers' Mart is another matter altogether.  Once a major retail establishment just on the edge of Downtown that the URA supported the Buncher company to redevelop in an attempt to revitalize the Strip District.  A strategy repeated in several different decades.

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Wednesday, July 08, 2015

Pittsburgh manufacturing

Pittsburgh manufacturing is in the news today.  See: PBT for example Why Pittsburgh will be getting a boost in its manufacturing efforts

A factoid I missed in the latest jobs report, but if you do the division it turns out that for the Pittsburgh region, the percentage of jobs in manufacturing industries has dropped to a new all-time low in the May data.  Manufacturing industries provide under 7.5% of all non-farm jobs in the Pittsburgh MSA for the first time ever.  Might be relevant when reading about the new efforts today.

Early on, manufacturing jobs had seen some slight rebound locally, and an even bigger and steady rebound nationally, from the lows hit during the most recent recession... but Pittsburgh manufacturing jobs have not followed the national trend since.. pretty flat in recent years and not keeping up with overall regional job growth... thus the percentage of jobs in manufacturing took a jump downward in the most recently monthly data.  As always, don't focus on the monthly change as much as the trend...

Anyways, here is what I get for the time series:

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Tuesday, July 07, 2015

Tech based entrepreneurship

Vanity alert, but given all the interest in technology based economic development of late, some may be interested in this book coming out: Routledge Handbook of Politics and Technology,  Edited by Ulrich Hilpert, Friedrich Schiller Universität, Jena, Germany. September 2015.

See the complete sales flyer here.

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Thursday, July 02, 2015

Tough times in the T

Here is another look at what is happening to mining jobs in Pennsylvania. One recently under-appreciated headline is about the potential loss of 400+ jobs at a shale services company in Indiana, PA. Trib: Halliburton to close Indiana County office. 400 jobs is a lot for Indiana County which has a total employment of roughly 27K, so about 1.5% of all jobs located in the county and I bet the % loss in payroll income is even higher. According to the state, Halliburton was the 11th largest employer in the county, and by my eyeballing of that list, the 7th largest private sector employer. So a big deal. It would be like a single firm dropping 10K jobs in Allegheny County.

While a lot of those jobs are not being lost outright, most of the jobs are moving to Ohio according to news reports. But the nonfarm payroll jobs data are a count of jobs by place of work, so all the jobs will be a net loss to the job count in Indiana County and most will be lost in Pennsylvania data.

But Indiana County is outside of the Pittsburgh MSA technically. I only point that out because I was thinking more about the job loss in Mining and Logging jobs I mentioned last week. While the statewide loss in mining and logging jobs last month was one of the highest monthly drops ever recorded, it is true that the same sector saw a net gain in jobs in Pittsburgh over the same period. So again I'll put up what I come up with for the mining and logging jobs in Pennsylvania net of Pittsburgh MSA data. That presents an even starker trends of what is happening across most of Pennsylvania between Philadelphia and Pittsburgh.

So here is what I get for the month over month change in employment in Mining and Logging jobs for Pennsylvania net of data for the Pittsburgh MSA.The red is the most recent data for the change between April and May of this year.

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Sunday, June 28, 2015

Obamacare and Pittsburgh

Just a question for someone else to try and answer... but says: The Supreme Court’s Obamacare Decision Is Already Worth $3 Billion For Insurers

Begs a Pittsburgh question... What is the Obamacare decision worth to Pittsburgh's economy?  Maybe a bit more holistically....  What will the Affordable Care Act mean to the Pittsburgh economy in the long run?  Seems like one of those things someone should have looked at by now?

If only Mr. Windle was a nurse and not a teacher, there would be some better PR on this.

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Thursday, June 25, 2015

'New' data and Pittsburgh's Hispanic populations

So here is a funny thing. I know many are excited by the headline that the Hispanic population locally is going up. See this version in the Trib: Hispanic migration to Western Pennsylvania double national rate

You know, the equally true headline could be "Growth in Pittsburgh's Hispanic population is slowing"

That's right. The news in the numbers just out are not actually new in any form. The annual growth rate of, for example Allegheny County's Hispanic Population has been coming in at 4 or more percent for many years... at least according to the data being reported on today. Don't believe me.. here is the data behind the headline today except not limited to just the most recent year: Here is the annual growth rate in Allegheny County's Hispanic population since 2010:

Allegheny County Hispanic Population 2010-2014:

Change over previous year
2014 23,377 921 4.1%
2013 22,456 1,046 4.9%
2012 21,410 1,134 5.6%
2011 20,276 1,074 5.6%
2010 19,202

Source: Census Bureau Population Estimates


So seriously, the latest data show a clear slowing in the growth rate. That darn 2nd derivative.  The positive trend here is actually nothing new.  But if you wonder how that fits into the larger story that the Hispanic population in Pittsburgh is extremely small, realize that the size of that population is so low that even if the local growth rate exceeds the national growth rate by several percentage points, it still will take decades to really catch up to what is a national average. and that assumes there is no more slowing of the trend locally. 

To a large degree, the nation as a whole is so much more Hispanic than Pittsburgh that as normal migration flows continue, just the normal churn of population will increase the Hispanic population locally.  It does not really mean Pittsburgh is changing as much as the nation has changed so much more and since the region is not completely an island, a reversion to the mean is a bit inevitable. The real question is why it is not happening faster than it is.

It also does not imply that we have become a magnet for recent international immigrants.. the headline is about the Hispanic population which is not the same thing. Those two groups get conflated in Pittsburgh to a degree they just don't elsewhere.  The latest data on international immigration, which is in the same census dataset as referenced above, gives us this benchmarking of the 2013-2014 net international migration for Pittsburgh compared to other metro areas:

So Pittsburgh is decidedly last... and if you dispute that then you must also not believe the numbers above.  Both are from the same Census Bureau estimates data for 2014. Go figure.


Someone strongly suggested to me that this all is big news because the higher rate of growth in the region's Hispanic population is still a recent break in trend.. that around 2008 or so this all changed.  Turns out no. Below is the annual percentage change for Allegheny County's Hispanic population going back to 2000-2001. Throw a trendline on that data and then re-read the current headlines. The growth rate seeming generating headlines this year (and curiously never before in the past in my memory) is actually the lowest rate for any year in that period with only one exception between 2004-5. The most interesting thing in all of this is that this is a news story at all.  But again, the new data brings me back to the efforts here going back to 2001 specifically focused on bringing more of the Hispanic population to Pittsburgh.

Actually the 2007-2008 timeline is when total net migration into Pittsburgh turned positive, but that it is something else.

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Sunday, June 21, 2015

Mr. Windle gets a haircut

Not exactly lost, but not much noticed either is the big loss of jobs in mining and logging industry sector in the latest dump of Pennsylvania jobs data.  How big a loss?  Total jobs in the mining and logging sector dropped 1,000 in May day compared to just a month prior.  Is that a big drop?  Basically the single biggest month over month loss since 1990 with the sole exception of June 1993 when the jobs count went down 1,200.  The time series of the monthly delta looks like this:

But is even June 1993 comparable to the recent downward blip?  June 1993 was the first full month of a major multi-state coal strike that would stretch through the end of the year.  The big job loss that month likely reflects a lot of those jobs as workers temporarily were on strike.  I am pretty sure the current job loss is not the result of any strike anywhere.

So of course the loss still is only a small fraction of the big run up in jobs in the same sector since 2008.  Still, if this is more than a one-off kind of month, and this rate of loss continues then there is something important going on.  What is curious is that the job loss does not really show up in any mass layoff disclosed to the state this year.

To be sure, the net job loss is across the whole industry sector which is not limited to natural gas. Coal in particular is a big part of the state's mining industry and coal firms are laying off.  Still, the lack of a mass layoff notice that correlates with the 1,000 job loss makes me think it is spread out across a larger number of smaller firms which may be the vast support sector for the shale industry. But we will be able to parse that much better in a few months, so hold that thought.  For now we just know the net job loss is pretty big in total.

What does it mean?  As always, take monthly data with a grain of salt.  If this industry job count bounces back next month, or just holds it own, then maybe it was a one time reset of jobs that may have expanded too quickly in recent years.  But if next month loses another big chunk of jobs then the question will be how far will this go and where will the job counts settle. Someone may need to do a study of what career decisions some of those workers made anticipating shale jobs long into the future.

This all comes on the state's methodological reset of the jobs impact of shale development in Pennsylvania.  Until recently, the state counted jobs, but the new methodology announced last week the number of shale jobs in Pennsylvania went from well over 200K to just about 30K instantaneously. if you ever wanted a case study in how methodology is important to measurement, something nobody ever really wants to talk about.  Everyone always just wants the number.

Maybe it is time to restart those annual economic impact reports that turned out to not be annual for very long.

At least one big potential market for natural gas took a big hit last week as well as Honda, the only company in the US to manufacture a natural gas fueled consumer auto, announced that it would cease production of its Civic GX.  There were supposed to be more and more private drivers with natural gas vehicles.  I actually believe there were more folks driving personal natgas vehicles in the city of Pittsburgh a decade or two ago compared to today, but that may be my one anecdotal observation. But I'm sure the fleet uses for the station in the Strip District continue unabated?


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