Experts pinpoint weak links in Pittsburgh's regional economy

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A shortage of skilled workers, as well as crumbling infrastructure and unfunded municipal pensions, were among the concerns of two CEOs and an investment manager who spoke at a conference Thursday showcasing a dozen regional public companies.

“We’re not training the right people with the right skills,” Randy Dearth, Calgon Carbon president and CEO, told investment professionals who attended InvestPA at the David L. Lawrence Convention Center.

Mr. Dearth said more cosmetologists and auto mechanics than the regional will ever need are being trained, while there is a shortage of skilled workers for more complex, higher-paying jobs. He cited the Robinson environmental products and services company’s Neville Island plant, which is always looking for welders.

“We have them for a few months and then they’re gone. They go to the fracking industry to make a few dollars more,” he said.

Todd D. Brice, S&T Bancorp president and CEO, said that unless the unfunded pension liabilities of Pennsylvania local governments are addressed, taxes will have to go up to fulfill the obligations. That could hurt the region’s real estate market, he said.

Governments also are facing big bills to repair or replace aging infrastructure, including water and sewer lines, Mr. Dearth said. “Infrastructure scares the heck out of me,” he said.

Mr. Dearth said the energy boom, including the region’s Marcellus Shale industry, has been a game-changer. He cited the resurgent U.S. chemicals industry, whose rebound has been fueled by cheap, abundant natural gas.

But even that boom could have limits. Charlie Smith, chief investment officer of Fort Pitt Capital Group in Green Tree, said one potential issue the region faces is how long the Marcellus Shale wells will last. There could be problems if they run out of energy before their operators are able to recover the millions of dollars invested in them, he said. Some of those investments were made with borrowed money.

“We’re monitoring balance sheets and [production] decline rates,” Mr. Smith said.

About 150 chartered financial analysts, fund managers and other professionals attended the all-day conference. They heard 35-minute presentations from Calgon Carbon, S&T Bank, Mylan, Allegheny Technologies and eight other public companies based in the region. They also had a chance to meet one-on-one with company officials.

The meeting’s sponsors included Buchanan Ingersoll & Rooney, Fort Pitt Capital and the CFA Society of Pittsburgh.

The conference was first held in Pittsburgh in December 2012. Similar conferences have been held in Louisville, Ky., Indianapolis and other cities.


Len Boselovic: 412-263-1941 or lboselovic@post-gazette.com

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