Pittsburgh is on the verge of a multiyear economic expansion that will produce the area's best job growth since the late 1990s, a leading local economist said yesterday.

Construction, health care and financial services will drive "a much better growth in this region than we've seen in quite a while," said Stuart G. Hoffman, chief economist for PNC Financial Services Group, during remarks made at a breakfast meeting hosted by commercial real estate brokerage Grubb & Ellis.

Mr. Hoffman also offered a sanguine outlook for the national economy in 2006, projecting that further increases in the Federal Reserve's target interest rate, to 5 percent, will help to keep inflation in the 3 percent range, and that consumer confidence and spending will remain strong.

Bob Bach, national director of market analysis for Grubb & Ellis, said that while Pittsburgh's office market continues to have a vacancy rate above the national average -- 19.6 percent vs. 14.5 percent -- the area's industrial real estate is outperforming the U.S. average. Locally, the vacancy rate for industrial space dropped from 12.8 percent to 8.4 percent in 2005, while the national average vacancy showed a smaller decline, from 9.1 percent to 8.4 percent.

Retail real estate also should remain strong both locally and nationally this year, Mr. Bach said.

Mayor Bob O'Connor made his own projection that with the growth of residential development Downtown, "You're going to see 'mixed use' that you've never seen before" in the Golden Triangle.