Jim Kunz, business manager for operating engineers’ union Local 66 in Pittsburgh, has reason to believe the recession will not hit his city as hard as others. So far, only 400 of the 5,200 members of his local actively pursuing work are out of a job. And Pittsburgh overall may have reason to share his optimism, long ago having diversified its business base and also learning to live with and recover from the decline of its steel industry.

Business agent Kunz says relatively few of his members are not working and there is cause for optimism that Pittsburgh will not suffer too much.
Photo: Jim Judkis / ENR
Business agent Kunz says relatively few of his members are not working and there is cause for optimism that Pittsburgh will not suffer too much.

Home values never surged in Pittsburgh they way they did in other markets, and homebuilding consequently has not crashed as badly. Last year, first-time homebuyers actually reduced the inventory of unsold homes in Pittsburgh’s North Hills suburb by 1%. Bankruptcies in Pittsburgh were only slightly higher in 2008 than in 2007, way below the 54% national increase for the same period.

Jack Ramage, executive director of Master Builders’ Association of Western Pennsylvania, representing building contractors, says school jobs and several long-term building projects should help the building sector. “The North Shore Casino, the new Penguins arena, the new Children’s Hospital we still have these high-profile projects,” he explains.

Office vacancy rates actually fell during part of last year in Pittsburgh, but the perception is that rents will come down. Jack Norris, managing director of CB Richard Ellis Inc., the broker, says Westinghouse is building a new headquarters in Cranberry Township, a community about a half hour’s drive from Pittsburgh, which is another good sign. Further, if you listen to Dan Onorato, chief executive of Allegheny County, Pittsburgh’s industrial heritage has put it directly on the cutting edge of technology. “In southwestern Pennsylvania, we’re at the center of nuclear technology and clean coal,” he says.

There are causes for concern. Steel is not completely gone from the scene, but the planned $1-billion upgrade of U.S. Steel’s Clairton coke facility has been postponed. Ramage says he is concerned about 2010, and that some small projects have been canceled.

PNC Financial Group., the big regional bank based in Pittsburgh, has proven that it is not immune to the troubles afflicting other large bank holding companies. Moody’s Investor Services says PNC is likely to receive aid from the U.S. Treasury Dept. to boost capital and spur lending.

Federal stimulus funding should help keep Kunz’s operating engineers working. So far, commitments for stimulus funding include the State Route 28 reconfiguration/reconstruction near Pittsburgh; the Fort Duquesne Bridge rehabilitation; and the rehabilitation of the Emsworth Lock and Dam and the Charleroi Lock and Dam. “We think this year will be as good as the last, and 2008 was a very good year. It will be years before we complete most of the bridge work that needs to be done.”

Then there are the intangibles that sustain the region. “People in western Pennsylvania are a little more frugal, more conservative,” says Kunz. “We’re survivors.”