Friday, August 19, 2016

Pennsylvania Mining - the end or the beginning

Just an update with July data on my running tally of how the mining industry is doing across central Pennsylvania. See previous posts for more discussion of the metric.  But I think I am calling this one and by my count, Central Pennsylvania has now given back all of the employment gains in mining that came after the expansion of unconventional gas (i.e. fracking) came to the state. If the data says 98%... well, this is July data so I am sure before August began a few weeks ago we crossed my arbitrary Rubicon by setting the baseline as the 2005 average.  But again, the question is how negative this trend will go given the slope is pretty dire right now.  


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Monday, August 15, 2016

Pennsylvania coal employment down 97%+

Few would have predicted that coal would be so much in the news this election season. Lots has been impacting the coal industry across the country and Pennsylvania has long - did I say long - been coal country.

I myself have been fascinated with the news headline that came out last week that Kentucky coal jobs hit lowest level since 1898.  The earth shattering factoid generating that headline was that the number of Kentucky coal miners dropped to 6,465 in the 2nd quarter of 2016, a low not seen since before the turn of the (19th) century.

Of course I had to ask what the comparable factoid for Pennsylvania? Has Pennsylvania coal mining employment dropped to levels of 1898? The latest published data itemizing coal mining employment specifically for Pennsylvania says there were 5,922 employed in coal mining as of the 4th quarter of 2015.  How does that compare to past coal mining employment in Pennsylvania?

I will admit not being able to find a clean dataset of coal employment going back far enough to answer that directly, But how about looking back just to 1898.  Is Pennsylvania back to 1898 levels?   Actually no, and not even close.  If you add up employment in both Anthracite and Bituminous mining, you get a Pennsylvania employment total in excess of 223 thousand in 1898 - a year that was likely a few decades before employment levels peaked remarkably.

By those numbers, Pennsylvania coal mining employment is down down over 97% from 1898 levels.  How far back do you need to go to get a Pennsylvania employment level under 5,922?  Hard to say given how far back you need to go. At least for Anthracite mining - which was the predominant type of coal mined in the state in that era - you have to go back to 1850 to get a lower employment count (p. 434).

So I didn't lie, Pennsylvania coal jobs are down 97% or more.  The title does not specify what the reference year was.   So when there is politispeak about how mining can/will come back, the first question you might ask is what year, or what century, the state's employment level can be rolled back to.

Which leads to an obvious, and possibly more pertinent, question.  What have been recent employment trends in Pennsylvania coal mining?  Here is the annual employment data since 2001, a time series that is remarkable stable when you think about it given all that has been happening across the industry elsewhere.



For reference here is the tabular data for that chart:

2001 8,421
2002 7,964
2003 7,062
2004 7,212
2005 7,415
2006 7,592
2007 7,420
2008 7,872
2009 7,685
2010 7,772
2011 8,454
2012 8,619
2013 8,002
2014 7,306
2015 6,428




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Monday, August 08, 2016

I want my Bitcoin MAC machine

So how do you trade in Bitcoin? Some limited establishments will take Bitcoin for paying various bills, but how do you easily acquire and sell Bitcoin. I mean easily, not mining new Bitcoin   which requires running your computer for hours/days/months on end  or getting involved with some of the ethereal trading exchanges you can create accounts on to trade Bitcoin. What was once one of the biggest trading exchanges for Bitcoin was Mt. Cox, but if you call up their website these days, you will see why that is not an optimal path to buying – or what is really important, selling – bitcoin. Why can’t you get Bitcoin the way you get ‘currency’ normally via a conveniently located Bitcoin MAC Machine ATM?

It turns out there actually are Bitcoin ATM machines and there are even some in Pittsburgh. Well, actually there are all of two Bitcoin ATMs. According to coinatmradar.com there are a total of 2 ATM machines within a hundred miles of Pittsburgh. I can't begin to vouch if the ATMs they have listed there, and mapped even, is a complete list.

Some ATM machines allow you to only purchase Bitcoin (purchase or exchange?... depends on whether you define Bitcoin as a currency or not.) Other ATMs allow exchange both to and from dollars. One ATM listed in Pittsburgh where you can only ‘buy’ Bitcoin is at the One Stop Mini Mart on the Blvd of the Allies. But that is reported to be non-operational as I write.

The sole machine listed where you can both buy and sell Bitcoin in Pittsburgh  and so the only place where you can trade your Bitcoin to get cold hard US cash  is at the Quick Stop on Liberty Ave. at the seam of Lawrenceville, Polish Hill and the Strip District. I would love to get a comment from anyone who has actually used this machine, or any other local Bitcoin ATM? Seriously, does it work and why use it?

The debates over whether Bitcoin is or isn’t a currency are still really only beginning. The thing I do wonder about is why Bitcoin is legit enough to be used at a range of retail establishments, and legit enough to have ATMs, why was the Ice Cream money that one local establishment created just a few years ago was deemed to be illegal. Ice cream may not meet the technical definition as a store of value, but compared to blockchains?

And with full disclosure I have no business relationship with these folks, so I won’t be getting a commission if you to this site to procure your own Bitcoin ATM machine (only $14K).

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Tuesday, July 26, 2016

Ex post frack Pennsylvania

Just a quick update on my ongoing tracking of how the fracking boom is doing across central Pennsylvania. Here is my quick calculation using June data showing how mining jobs are faring across Pennsylvania outside of the Pittsburgh MSA.  The rate of decline has slowed a tad, but hard to see a soft landing in the time series and soon the number of jobs in this metric will drop below where they were before the shale development even began. The question remains, how much lower will it go?


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Thursday, July 07, 2016

How many bicentennials does one city deserve?



Lest we forget, this isn’t the city of Pittsburgh’s first ‘bicentennial.’ The curious thing about the City of Pittsburgh’s bicentennial this week is that is not the city’s first bicentennial celebration.  In fact it isn’t even the 2nd.   



The biggest celebration the city ever held was in 1958. The first bicentennial celebrating the nominal founding of Pittsburgh as a place on the English colonial map and an outpost for the Ohio Company by Royal Charter as Virginian gentry looked to extend their interests. Really it was the de facto  founding of Upper Yohogania as Virginia would name the land underneath us later on.It would be decades before the best cartographers and lawyers of the era settled a lingering debate whether the forks of the Ohio rested within the boundaries of Virginia or Pennsylvania.

Take a look at how big that celebration was in 1958.  One small project commissioned for the 1958 Bicentennial was the first edition of Stefan Lorant’s opus: Pittsburgh: The Story of An American City. That book would not be finished for 7 years in the end, but it was initially commissioned for the bicentennial celebration and went on to 4 more editions subsequently. More than that, Pittsburgh Bicentennial Coins were minted, and check out this great montage of Pittsburgh Bicentennial advertisements via PBRTV.com. There was even a dedicated Bicentennial office set up years prior to the event to manage it all.

1958 was a period of immense change across the city, far more than today no matter how you slice it.  Take a look at this Pittsburgh Bicentennial Redevelopment Map (below) also produced for the celebration. Look at all we now think of what defines modern Pittsburgh (some good and some bad) that was in construction, or even just in planning, at the time.





Then there was the 2nd Bicentennial..  In 1994  a 'little known bicentennial for the city' was pushed as a reason to celebrate again. The nominal excuse was the anniversary of when Pittsburgh was formally incorporated as a Borough.  Ok, then.  The city tried to make a big deal of it but even back then editorials were opining that there was No Point in Celebrating the Bicentennial Again. Still it sparked a yearlong celebration of sorts.


So here we are, again celebrating a bicentennial of sorts. This third bicentennial now celebrates the conversion of the tiny Borough in to a newly defined city of the Commonwealth of Pennsylvania. I am sort of surprised we didn't make a bigger deal of Pittsburgh's first sestercentennial which ought to have been in 2008.  We could be doing this every few years if you get just a little more creative. 

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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. 





PERSONS NATURALIZED BY REGION OF BIRTH 
FISCAL YEAR 2014
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   http://bigbytes.mobyus.com/commute.aspx

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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