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2002 drop first annual decline since '91, biggest since mid-'80s

Friday, March 21, 2003

By Jim McKay, Post-Gazette Staff Writer

The Pittsburgh region was hit harder in 2002 by the recession than was initially thought, with employers shedding more than 12,000 workers. It was the biggest yearly decline in employment since the collapse of the steel industry in the 1980s and the first annual decline in jobs for the region since 1991.

According to revised employment data culled from an annual review of business payroll taxes, the state Department of Labor and Industry said total nonfarm jobs fell by 12,100, or 1.1 percent last year, with big declines reported in manufacturing, trade and transportation. Initially, the state had estimated that businesses in the six-county metropolitan region pared payrolls by slightly more than 9,000 jobs during the year.

The last time business payrolls shrank was in the 1990-1991 recession, when firms in Allegheny, Beaver, Butler, Fayette, Washington and Westmoreland counties eliminated 7,200 jobs.

On a positive note, 2001's previously announced job gain of 6,000 jobs was revised upward by 900 to 6,900, according to figures prepared for release today. But that gain paled in comparison with the 2002 losses.

Manufacturing was hit the hardest, ending last year with average employment of 113,100, a decline of 7,600 jobs from 2001. Construction, another largely blue-collar occupation, lost an average of 1,400 jobs over the year.

Average employment in the huge sector covering the trade, transportation and utility industries, which would include thousands of jobs lost at struggling US Airways, fell by 5,191 to 232,600 in 2002.

Not all industries contracted. On the plus side, education and health services, which would include colleges, universities, hospitals and other medical careers, gained more than 4,500 jobs, ending the year with average employment of 204,400.

Leisure and hospitality industries, an array of arts, entertainment, lodging and food establishments that employ more than 100,000 people, gained on average nearly 1,100 jobs. Local, state and federal government gained 1,100 for a 2002 average of 125,900 jobs.

Hopes that the local job front might improve this year got a dose of cold water yesterday, as the state said that mounting job losses caused the local jobless rate to shoot up three-tenths of a percentage point in January to 6.1 percent, the highest it has been since June 1995.

While the unemployment rate typically rises in January when the holiday season ends and retailers trim their staffs, the magnitude of this January's jump was noteworthy, with local employment, adjusted for seasonal factors, plunging 16,000 from January 2001.

Observers speculated this year's colder weather may have aggravated the situation by keeping some people away from work, particularly in the construction and hospitality industries.

Still, the jump in January's jobless rate marked the first time in two years that it's exceeded the national rate, which stood at 5.7 percent in January, and matched the state's rate, also at 6.1 percent in January.