Dealmakers 2018
The Numbers & The Narrative
Compiled by the Pittsburgh Regional Alliance, the economic development marketing affiliate of the Allegheny Conference
– Steven Levitt, American Economist
Headlines
A Strong Year: 340 Deals Across Southwestern PA
Total Activity Exceeds Every Year of Investment Project Tracking Since 2007
Capital Investments Hit Nearly $3.8B
Seven Years and Running, CAPEX Surpasses $2B
Information Technology & Robotics Continues Rapid Growth
Most Active Sector for Second Straight Year
#1 Jobs Generator (Among Sectors)
Manufacturing Remains Strong; a Solid Second for Announced Projects
Energy Sector Activity Rebounds
Deals More Than Doubled
– Laura Shapira Karet, Pittsburgh Regional Alliance Chairperson and President & CEO, Giant Eagle, Inc.
Snapshot
Total Deals
82 Over 2017
Investment Deals
48
Development* Deals
34
*infrastructure and brick and mortar real estate developments
Combined CAPEX
Investment Projects
Development Porjects
Total Job Impact
56% Over 2017
New Jobs
15%
- New jobs on the rise - 4 years & running
- Largest total number since 2012
- 10,568 retained jobs / 111%
consecutive year
- Total job impact exceeds 10K, 2014 - 2018
Capital Investment
Combined Capex
5th Highest Amount on Record
Region-Wide Total Exceeds $2B, 7 Years and Running
Energy-related capital investment was highest among region’s key sectors
Nearly 3X the 12-year average
Who's Investing
Photo Credit: Bruce & Merrilees
Hickory Run Energy Station
$863M
- Natural gas-fueled electrical generation plant
- Will supply 1,000 megawatts of power to the region, enough to power more than a million households
North Beaver Township, Pa. (Lawrence County)
Rye Development
$420M
- Hydroelectric infrastructure
- Incorporation of a renewable form of energy generation
- Powered by Pittsburgh’s signature three rivers
Allegheny, Beaver & Greene Counties
Energy Infrastructure
Pipelines, compressor stations, controls
$135M
Allegheny, Beaver & Greene Counties
*CAPEX total include both announced investment and development projects
IT & Robotics
Solid Growth in IT & Robotics – Most Active Sector, Two Years & Running
Deals
51% Over 2017
CAPEX
Total Jobs
Deeper Dive
Where the Money Is
- IT, which includes robotics, leads among SW PA’s key economic sectors when it comes to wages
- IT employee wages are 94.5% higher than the average job wage in region
- Annual average wage among regional IT companies: $104,585 / Average regional job wage - $53,900
Economic Impact
- 2.94 jobs, direct and indirect, supported by each regional IT employee
- 101,000+ total jobs in SW PA supported by IT
- Deals more than doubled over 2017
- IT deals drove growth as robotics announcement dropped slightly from 20 to 17
- Leading sector for new job creation
- 2,428 new jobs
- 30% increase over 2017
Who's Investing
Affirm
- Fintech company attraction
- Headquartered in San Francisco; now with offices in Pittsburgh + NYC
- 100 new jobs & projecting 500 new employees by 2023
City of Pittsburgh (North Shore)
Amazon
$3M
- “Pittsburgh Tech Hub,” 22,000 SF expansion
- Focused on machine translation and speech science
- 125 new jobs
City of Pittsburgh (South Side)
Photo Credit: Bossa Nova Robotics
Bossa Nova Robotics
- Headquarters expansion + new test facility
- In partnership with Walmart, providing shelf-scanning robots to 50 stores for inventory automation
- Carnegie Mellon University spinout
- 40 new jobs
City of Pittsburgh (Strip District)
Photo Credit: CBRE
$15M
- New artificial intelligence lab
City of Pittsburgh (Oakland)
plus
- Expansion
- Leased space capable of accommodating 400 – 500 new employees
City of Pittsburgh (Strip District)
IAM Robotics
- Headquarters expansion
- Logistics robotics
- 61 new jobs
- 80 total job impact
Sewickley, Pa. (Allegheny County)
Lucas Systems
$7.3M
- Headquarters, 45,000 SF expansion
- 55 new jobs
- 66 retained jobs
- 121 total job impact
Wexford, Pa. (Allegheny County)
Photo Credit: RE2
RE2 Robotics
- Headquarters expansion
- Develops human-like robotic arms for use by organizations including the U.S. Department of Defense
- 9 new jobs
- 46 total job impact
City of Pittsburgh (Lawrenceville)
Voci Technologies
- CMU spinout utilizing artificial intelligence to analyze voice data
- Headquarters expansion
- 11,000 SF new facility
- 50 new jobs
- Up to 19 retained jobs
City of Pittsburgh (Strip District)
– Max Levchin, CEO and Co-founder of Affirm
Pittsburgh Business Times, Oct. 22, 2018
– Joel Reed, CEO, IAM Robotics (from IW and E&Y’s Investment in Pittsburgh’s Technology Sector Trends and Highlights, 2009 - 18)
Manufacturing
Built to Last, Manufacturing Remains Strong
No. 2 Most Active Sector for Deals Across SW Pennsylvania
Deals
CAPEX
33% Over 2017
Total Jobs
62%
Deeper Dive
- 23.9% of regional manufacturers produce fabricated metals
- 17.7% of manufacturing employment is in fabricated metals
- 4X the national average
- $62,345 – average annual wage for regional manufacturing employees
- 15.6% higher than the average job wage in region
- 2.72 regional jobs, direct or indirect, supported by each regional manufacturing job = ~250K total jobs
Who's Investing
American Textile Company
- Expansion
- 98,000 SF new distribution center
- 75 new jobs
- 250 retained jobs
- 325 total job impact
McKeesport, Pa. (Allegheny County)
Ellwood Quality Steel (EQS)
$60M expansion
- 110,000 SF building housing equipment for re-melting steel that will be used in the aerospace and military fields
- 25 new jobs
New Castle, Pa. (Lawrence County)
Photo Credit: Emmanuel Panagiotakis, PittsburghPictures.net
Kenson Plastics
$1.7M expansion
- Plastics for the aerospace, mass transit and medical industries and more
- 15 new jobs
- 80 retained jobs
Chippewa, Pa. (Beaver County)
Bergad, Inc.
$2.2M expansion
- 50,000 SF addition for this producer of specialty polyurethane foams
- 30 new jobs
- 30 retained jobs
- 60 total job impact
Armstrong County
– Paul Bergad, President, Bergad Inc.
The Kittanning Paper, May 11, 2018
Financial &
Business Services
A Century-Plus of Expertise in Asset Management, Banking and Corporate Support
Deals
CAPEX
4X More 2017
Total Jobs
Deeper Dive
- No. 1 Contributor to Gross Regional Product (GRP) - $50B
- Region’s largest employer
- 234,036 employees
- 2.26 regional jobs, direct or indirect, supported by each regional financial & business services job = 528+K total jobs
Who's Investing
Bechtel Plant Machinery
$28M expansion
- 90,000 SF headquarters
- A prime contractor for the United States Naval Nuclear Propulsion Program
- 600 new jobs
Monroeville, Pa. (Allegheny County)
Photo Credit: Limbach Holdings
Bombardier Transportation
$43M retention
- Several business divisions relocating to 90,000 SF in Strip District
- 550 retained jobs
City of Pittsburgh (Allegheny County)
Roadrunner Recycling, Inc.
- Headquarters expansion
- 40 new jobs
- 30 retained jobs
- 70 total job impact
City of Pittsburgh (Allegheny County)
– Graham Rihn, CEO, Roadrunner Recycling
Pittsburgh Business Times, April 12, 2017
Energy
Deals
113% Over 2017
CAPEX
Highest amount among 5 key sectorsTotal Jobs
Deeper Dive
- $30B in GRP generated by energy industry
- $94,796 – average annual wage for regional energy employees, only trailing IT & Robotics
*Energy deals include investments across multiple sectors
Who's Investing
APV Renaissance Partners Opco LLC
- Attraction
- Renaissance Energy Center, 1,000-megawatt, natural gas power plant
- 25 new jobs
Monongahela Township, Pa. (Greene County)
Nine Energy Services
$4M expansion
- 38,000 SF regional headquarters for Houston, Texas-based oil & gas company
Washington, Pa. (Washington County)
Photo Credit: Limbach Holdings
Watt Fuel Cell
- Expansion
- Doubling production of solid oxide fuel cell stacks and systems that run on propane and natural gas 20 new jobs – hiring engineers, production line and administration employees
Mount Pleasant, Pa. (Westmoreland County)
– Caine Finnerty, Ph.D., President and CEO, Watt Fuel Cell
Pennsylvania Business Central, July 27, 2018
Healthcare &
Life Sciences
Deals
42% From 2017
CAPEX
Total Jobs
39%
Deeper Dive
- No. 2 industry in region for Gross Regional Product ($13.3B), behind financial & business services
- 1.81 jobs, direct or indirect, supported by each regional healthcare & life sciences job = 256+K total jobs (on par with manufacturing)
Who's Investing
Photo Credit: Walnut Capital
Philips Sleep & Respiratory Care
$80M
- 20,000 SF expansion
- 100 new jobs
- 1,700 retained jobs
- 1,800 total job impact
City of Pittsburgh (Allegheny County)
Helomics
- Expansion
- Artificial intelligence precision diagnostics for cancer treatment
- 6 – 8 new jobs
- 26 total job impact
City of Pittsburgh (Allegheny County)
LyGenesis
- Expansion
- Biotech startup, University of Pittsburgh spinout
- 3 new jobs
City of Pittsburgh (Allegheny County)
– John Frank, Business Group Leader, Philips
CBS Pittsburgh, Sept. 28, 2018
Distribution
Distribution Delivers Big Deals in 2018
Who's Investing
Photo Credit: Indiana County Center for Economic Operations
URBN
$80M attraction
- Distribution
- A major point in the eastern U.S. pipeline between suppliers and the consumers and retail outlets for URBN’s family of brands
- 225 new jobs
Indiana, Pa. (Indiana County)
Kenco/Shell Lubricants Americas Regional Distribution Center
$49M attraction
- Distribution
- 455,000 SF facility
- 200 – 215 new jobss
Burgettstown, Pa. (Washington County)
– David Ziel, Chief Development Officer, URBN
Indiana Gazette, Sept. 27, 2018