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Economy & Business

Pittsburgh Area Construction Spending Down In January, But Analysts Aren’t Worried

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Flickr user joseph a
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Construction starts in the 7-county Pittsburgh metro region increased 5 percent in 2014. PNC's new headquarters was completed last year.

Total construction starts in the seven-county Pittsburgh metropolitan region for January 2015 were down 47 percent from January 2014, according to construction industry analysis firm Dodge Data & Analytics.

Total building fell from $171.9 million in January 2014 to $90.7 million in January 2015. Residential construction dropped 37 percent from $115 million to $72.1 million, while non-residential building starts slid 68 percent from $56.9 million to $18.5 million.

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Credit Courtesy Dodge Data & Analytics
Construction starts have steadily increased since 2009, but haven't yet reached pre-recession levels.

But Richard Branch, Senior Economist at Dodge, said such a narrow comparison can be misleading.

“Certainly for Pittsburgh (construction has) been trending up for the past couple of years, and in fact in 2014, total building in the Pittsburgh MSA is up 5 percent from the 2013 level,” Branch said.

In 2014, construction in the Pittsburgh area totaled $2.1 billion, a 5 percent increase over 2013, and Branch said he expects another 3 percent jump in 2015.

Much of last year’s increase can be attributed to multi-family residential construction, which leapt 56 percent to $391 million.

“Vacancy rates in the Pittsburgh area for apartments (are) very low,” Branch said. “We’re seeing net positive migration in Pittsburgh, which is really the only metro area in Pennsylvania that is seeing a net positive. People are … moving into Pittsburgh.”

He also said endowments at the University of Pittsburgh and Carnegie Mellon University are up, which frees up funding for additional construction in the education sector. Additional growth can be in hotel construction.

“I noticed that the convention center bookings for 2015 should set a record, and tourism growth in the area is actually quite good too,” Branch said.

Those in the building trades are also expecting continued growth in transportation projects, due to a $2 billion 5-year transportation spending plan passed by the state legislature in 2013.

“All indications that we’re looking at is we’re going to have a pretty good year, especially on the transportation side, roads and bridges, the heavy side,” said Rich Stanizzo, business manager for the Pittsburgh Regional Building Trades Council.

Stanizzo also cautioned against looking at January’s numbers in a vacuum.

“It would scare me a little bit more if we start into the second quarter or later into the first quarter and we didn’t see a tick up in that stuff,” Stanizzo said. “Then it would start to bother me, because then we’re starting to get into the construction season which would be April, May, June for people getting into the ground and starting things.”