Capital investment in southwestern Pennsylvania totaled $2.9 billion in 2015, marking the ninth consecutive year capital investment in the region exceeded $1 billion, according to the Pittsburgh Regional Alliance’s (PRA) ninth annual Business Investment Scorecard. The report includes companies that announced plans in 2015 for new or increased business success in the 10-county region.
In total, 275 total business deals were tracked by the PRA and its economic development partners. Included were 206 investment deals (attractions, expansions, relocations, retentions and startups) and 69 development deals (real estate and infrastructure). The total employment anticipated as a result of these investment announcements is 14,951— 5,417 new jobs and 9,534 retained jobs, marking the highest overall anticipated job impact since 2011.
These investments also deliver a “multiplier effect.”
“What’s trending is that in addition to the actual anticipated job creation and retention that are associated with the deals we track, many investments are tied to a robust regional supply chain,” said PRA President David Ruppersberger. “Businesses that are growing here need other businesses to supply all that’s necessary to keep operations humming. It’s construction workers, truck drivers, makers of hardware and packaging, back office support and so much more. The supply chain in the region is where jobs – and entrepreneurial opportunities – really begin to multiply.”
Manufacturing, Financial & Business Services, Info Tech Lead The Way
For the seventh time in nine years, manufacturing had the strongest showing in terms of investment activity with 63 deals announced. Financial and business services tied with information technology as the second most active sector (37 deals each) and activity in the energy sector was exactly the same in 2015 as it was in 2014 (31 deals), underscoring that energy continues to create opportunity in the region, just not at the same pace as it previously had.
The region’s key sectors – advanced manufacturing, energy, financial and business services, healthcare and life sciences and information technology – have found their norm and are maintaining it, as evidenced by annual activity in each key sector which is in line with each sector’s nine-year average, calculated by the PRA market research team. For the most part, key sectors’ performances have not varied significantly from year to year. For some, investment activity accelerates while others experience a decrease. Fluctuation is expected and is part of the smart design under the hood of the regional economy.
Pittsburgh’s diverse and balanced economy has allowed the region to achieve a full recovery from recession quicker than nearly all of the country, record-level employment and a Gross Domestic Product – a measure of the value of the goods and services produced here – which pulled ahead of the U.S. average (and that of 15 benchmark cities) for four of out five years from 2010-14.
Consistent investment activity across these key sectors keeps the regional economy performing at a steady pace.
“Since the Great Recession, Pittsburgh looks solid,” according to Jim Futrell, vice president of market research and analysis for the PRA. Futrell oversees the scorecard’s compilation and provides an annual analysis. “Diversification of our economy is paying off. Being dependent on five key sectors – not one – carried us through the recession. We didn’t fall as far as other regions did, and we emerged from recession quicker. Diversification has set up the region to be a consistent performer, with a fair share of investment from higher-paying industries. For the past nine years, consistency and steadiness carry the day because economic development is a marathon, not a sprint.”
Who Is Investing in the Pittsburgh Region?
“A diverse and balanced economy has given Pittsburgh a ‘safe bet’ status. We’re attracting smart money and people – companies and individuals looking for a place with a performance record that instills confidence” said Ruppersberger. “The investments we’re seeing run the gamut from startups and entrepreneurial ventures to legacy industries, such as manufacturing and finance. And some of the world’s biggest brands have put down roots here – Google, Apple, Facebook and Uber – to name a few. When companies of that magnitude – or frankly, any company, large or small – announces a decision to locate and grow here, it’s a vote of confidence in the future of the Pittsburgh region.”
To capture even more business investment and job creation for the region, the Power of 32 Site Development Fund has been created in greater Pittsburgh. A private, patient mortgage loan fund with 14 limited partners from the private sector and foundation community, the site development fund closes critical infrastructure financing gaps and moves prepared sites to market faster. Exclusively for site preparation before construction can begin, the nearly $49 million fund makes loans to priority sites that have the potential for regional impact. The fund’s footprint is the 32-county greater Pittsburgh region, comprising parts of Pennsylvania, Maryland, Ohio and West Virginia.
A Magnet for Millennials
The population of well-educated young professionals is on the rise in southwestern Pennsylvania. According to PRA market research findings, the region has the third highest concentration of young people with advanced degrees – trailing only Washington, DC and Boston. The median age of the city of Pittsburgh is 32.8, below the national average. And the 2014 Pittsburgh Technology Council report, “Pittsburgh’s Creative Clusters” estimates that nearly 270,000 “creatives” – individuals employed at 11,000-plus creative sector establishments – call the region home. At the close of 2015, Realtor.com ranked Pittsburgh among the top 10 U.S. markets likely to see a surge of Millennial buyers in 2016. Second to Atlanta, Pittsburgh was cited for its low housing costs, good public transportation and revitalized waterfront.
Four Companies Growing in Pittsburgh
Four companies that are betting their futures on Pittsburgh include E.A. Fischione Instruments, JLL, Uber and Wombat Security Technologies. All announced plans in 2015 to either establish or grow their presences in the region.
- E.A. Fischione Instruments, Export (Westmoreland County) PA
E.A. Fischione Instruments, Inc. designs, develops, manufactures and distributes advanced microscopy and nanotechnology devices to the global scientific community. Market segments served include electronics, energy, life sciences, industrial and research. Fischione products are found in more than 500 laboratories worldwide and are used by microscopists, materials scientists, metallurgists and life scientists working at universities, semiconductor manufacturers, nuclear and medical materials research firms, steel, automotive, aerospace and communications companies, as well as branches of the United States Department of Defense and several national laboratories. With state-of the-art technology, Fischione Instruments operates from its 24,000-square-foot facility located 25 miles east of the city of Pittsburgh. In 2015, the company announced a $5M expansion that’s expected to create 20 new jobs.
- JLL, Pittsburgh (Allegheny County), PA
JLL is a financial and professional services firm that specializes in commercial real estate services and investment management. Its 58,000 people across 230 corporate offices worldwide serve the local, regional and global real estate needs of corporates and investors in more than 80 countries. In May 2015, the company announced that it will be adding 115 new jobs in the next three years as it moves to its new downtown Pittsburgh offices at Tower Two-Sixty, at which it will be the primary tenant.
- Uber Advanced Technologies Center, Pittsburgh (Allegheny County), PA
The Uber Advanced Technologies Center is the Pittsburgh division of the elite Uber Engineering Team. Focused primarily on the areas of mapping, safety and autonomy, the team is composed of world-renowned researchers with decades of experience in fields ranging from mechanical engineering and robotics to software and electrical engineering. The anticipated employment roll in Pittsburgh is 400.
- Wombat Security Technologies, Pittsburgh (Allegheny County), PA
Wombat Security Technologies provides information security awareness and training software which have been proven to reduce successful phishing attacks and malware infections by up to 90 percent. Wombat Security Technologies is born from research at the world-renowned Carnegie Mellon University (CMU). In 2015, the firm announced that it planned to hire 12 more people and expected to grow its employment ranks by another 50 percent by the end of 2016.