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Area economy in stable shape, future looking very promising

Allegheny Conference’s Flanagan looks down the road for Rotarians

GOOD NEWS — Bill Flanagan, chief corporate relations officer for the Allegheny Conference on Community Development, told members of the Steubenville Rotary Club Friday afternoon that the area’s economy is stable for the near term and poised for growth during the next decade. - Paul Giannamore

STEUBENVILLE — The Pittsburgh region, encompassing the Steubenville-Weirton area and beyond, is in stable economic shape and faces exciting growth prospects during the next decade.

“The good news is the fundamentals are strong, the opportunity is enormous and, if we do this well, there’s no reason that the best days for this region are not still ahead of us,” said Bill Flanagan, chief corporate relations officer for the Allegheny Conference on Community Development as he spoke to the Steubenville Rotary Club’s weekly luncheon meeting at the YWCA on North Fourth Street. He said everything he addressed, however, is dependent upon what happens with the incoming administration of President-elect Donald Trump.

Flanagan recited job statistics that show the area is far better off than when he arrived as a TV reporter working in Pittsburgh in 1982, when double-digit unemployment in the wake of the first collapse of the domestic steel industry was taking place.

Flanagan said there actually are about 100,000 more people working in the Southwestern Pennsylvania region than there were at steel’s peak in 1979. Flanagan said that impacts the Steubenville-Weirton area because many local residents are among those 100,000.

“If you liked the economy in 2016, you’ll like the economy in 2017,” he said. Flanagan said while the area has begun to lag in unemployment, it’s largely the result of the slowdown in the energy industry. Activity has moved during the price slump to development of what is termed “mid-stream” operations, meaning construction of gathering and pipeline facilities.

One major driver of the region’s economy will be construction of the Shell ethane cracker plant in Beaver County, up the Ohio River from East Liverpool. At its peak construction, probably around 2020, he said there will be 6,000 construction jobs on the roughly $6 billion plant.

At the same time, a $2.5 billion investment is possible in the Emsworth Locks and Dam, which forms the Pittsburgh pool of the Ohio River, and other locks to improve the navigable river transportation system, depending on the appropriations process in Congress.

Those two projects together, representing nearly $10 billion of major construction investment, will strain the availability of employees and contractors to do other jobs in the region, as well as available materials.

“If you plan to build in the near future, you will want to keep an eye on that,” he said, indicating that if workers, firms and materials are in tight supply, the costs of projects could go up during the period of the cracker’s peak construction.

Flanagan said the area is leading the nation in terms of young people with advanced degrees and has seen a greater influx of millennials than the national average. And, he noted, Google and Uber have established bases for research on autonomous vehicles in Pittsburgh, putting the city at the forefront of the developing technology.

“The foundation has been laid for a diverse economy,” he said.

There is a looming labor deficit coming, however.

Flanagan said research shows there will be an average of 29,000 baby boomers eligible to retire during each of the next 10 years, while the number of 18-year-olds entering the work force or being educated to enter the work force in the region will decline annually from the 26,000 expected to graduate this year. That means the area will fall, according to surveys, about 80,000 people short to fill the jobs that will be available, and that is only if all of those young people stay in the region to live and work. He said the Pittsburgh area does a poor job at retaining its own educated young people, losing a higher percentage than other areas. The area also lacks diversity, which will become important as the need to attract workers from elsewhere grows in the coming years.

“It’s a good challenge to have. When I came here in 1982, there were more people than jobs,” he said.

Meeting the challenges of filling the worker shortage will take efforts of every community, every business and individual in the 32-county greater Pittsburgh region, he said.

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