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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