Gus Faucher, keynote speaker at the annual State of the Pittsburgh Economy conference, apologized “for saying last year that a recession was on the way.” Following his tongue-in-cheek acknowledgment, Faucher, PNC chief economist, said he believes the nation will avert a downturn in 2024 as well.
No one assembled at the James Rohr Auditorium at PNC’s corporate headquarters in downtown Pittsburgh Wednesday morning was disappointed.
Faucher mostly delivered an upbeat forecast for the U.S. this year and for Pittsburgh, although some prepandemic issues remain unresolved here.
The Institute for Entrepreneurial Excellence at the University of Pittsburgh and PNC Financial Services Group Inc. (NYSE:PNC) again partnered to examine economic indicators impacting businesses in the region, as well as national and regional conditions.
IEE, part of Pitt’s Office of Innovation & Entrepreneurship, provides consulting, education and networking opportunities to businesses throughout western Pennsylvania.
Robert Stein, IEE executive director, said the 2024 conference was the ninth such event with PNC and that the relationship between IEE and the bank spans “30 years and counting.” Stein, who is also associate vice chancellor, innovation and entrepreneurship at Pitt, served as master of ceremonies and introduced the speakers.
The lineup also included:
- Lou Cestello, PNC regional president for Pittsburgh and Southwestern Pennsylvania
- Jen Gilburg, DCED deputy secretary, technology and entrepreneurship
- Sara Innamorato, Allegheny County executive
- Ed Gainey, mayor of Pittsburgh
- Rich Fitzgerald, executive director, Southwestern Pennsylvania Commission
- Stefani Pashman, CEO, Allegheny Conference on Community Development
- Christina Cassotis, CEO, Allegheny County Airport Authority
Common themes threaded through the presentations included: support from Gov. Josh Shapiro’s administration, the importance of diversity and of partnerships, restoring/reinventing downtown Pittsburgh, increasing the workforce and making sure to capitalize on federal funding opportunities.
“We need Pittsburgh to be a great place and you can’t have a great town without great entrepreneurs and small businesses,” said Cestello, who also chairs Pitt’s board of trustees.
Innamorato brought up the difficulties companies still have finding employees, pointing out that there are two job openings for every job seeker.
“We have to double down on quality-of-life issues,” she said, listing transit, child care, investing in young people and homegrown talent.
Gilburg said the commonwealth has its first economic development plan in 20 years and cited key accomplishments since Shapiro took office in January 2023 to make Pennsylvania more competitive. The time frame for permits, for example, has been reduced from eight weeks to three days “and we’re trying to get it down to within a day,” she said.
Gainey said that even though things are improving, “we’re not there yet. We have to stay intentional.”
Working together is crucial, whether in revitalizing downtown, convincing young people to stay in the region or attracting outside talent.
“If we can diversify portfolios, we can diversify downtown,” Gainey said. “People have got to see their culture in the city.”
If not, he cautioned, “we will not grow up. We’ll grow old but we won’t grow.”
Fitzgerald, who was succeeded by Innamorato as county executive in January, has taken on a new role with the Southwestern Pennsylvania Commission. He said county commissioners are eager to work together, citing strong attendance at a recent gathering in the Strip District.
“Government and economic development are really team sports,” Fitzgerald said.
Pashman noted that despite all the region’s assets, it’s not seeing results. She singled out an issue the conference is “laser-focused” on — reinventing downtown Pittsburgh — and said it expects to submit a plan to the state by the end of the quarter.
“As downtown goes, so goes the broader region,” she said.
Cassotis talked about the ways the new airport terminal is a means to create employment for Pittsburgh companies and a sense of community, and how the airport is using local business and academic partnerships to attract more airlines around the world to service the region. It will host the second Aviation & Robotics Summit in May, further shining the spotlight on southwestern Pennsylvania.
Faucher’s optimism for the national economy is spurred by multiple factors. Interest rates appear to have peaked, consumers are in good shape, the stock market is strong and employment has not only fully recovered from the pandemic but it is higher — so is economic activity — than prior to the Covid-19 outbreak.
He referenced PNC’s spring 2024 survey of owners/leaders of small and midsize companies, which was released early on Wednesday. Among the findings was record high optimism by the business owners about their own companies during the next six months.
“Small businesses are telling us something,” Faucher said.
Growth won’t be as strong in 2024 as in 2023, “but no recession,” he said. PNC expects the Federal Open Market Committee will start to cut the federal funds rate in the second quarter which will support growth in 2025.
But Pittsburgh “continues to fall behind,” he said, particularly due to its workforce issues which Faucher brought up at previous conferences well before 2020. Employment Is still down 2% from prepandemic levels and the region lags both Pennsylvania and the U.S. There are about 40,000 fewer people available for work and he expects it will remain an issue for several years ahead.
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