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MELLON BANK: PITTSBURGH INDEX SLIPS IN MAY FOR FIFTH CONSECUTIVE MONTH

MELLON BANK: PITTSBURGH INDEX SLIPS IN MAY FOR FIFTH CONSECUTIVE MONTH
 PITTSBURGH, July 7 /PRNewswire/ -- The Mellon Index of Economic Performance for the Pittsburgh metro area, which gauges the overall economic vitality and momentum of the region, slipped 0.6 percent in May, marking the fifth consecutive decline for the index, the bank said today.
 The latest drop was led by weakness in contract awards for commercial building, a decrease in housing permits and further reductions in goods-producing employment. On the positive side, there was a slight pickup in service-producing jobs and a lengthening of the factory work week to its highest level in nearly two years. However, these positive developments were overwhelmed by the magnitude of the negative readings for the other index components.
 The recent trend in the Mellon index suggests a sluggish local economy. Employment remains below its year earlier level and has actually retreated since February of this year. Thus, as has been the case with the national economy, the Pittsburgh area has not been able to establish a sustainable recovery from the 1990-91 recession. Of course, the region has had to contend with two well-publicized strikes which have almost certainly hampered the economy's ability to rebound. In addition, the winding down of construction at the airport, the delays in hiring at the Sony plant, and the announcement of permanent plant closings have combined to take the forward momentum out of the economy. With the national economy showing evidence of faltering again in June, the prospects for the local economy have probably dimmed somewhat.
 On a brighter note, there has been a significant decline in interest rates of late which should provide some spark to the regional economy. Housing and durable goods spending will get a boost from the lower borrowing costs over the next few months while commercial loans have become more affordable. Still, a meaningful revival of activity in the Pittsburgh region will depend heavily on how well the national economy responds to the latest easing of monetary policy. Unfortunately, that remains an unsettled issue.
 In May, the Mellon Index of Economic Performance for the Pittsburgh area stood at 99.6, down from 100.2 in April.
 MELLON PERFORMANCE INDEX
 Pittsburgh
 May
 (1980 equals 100)
 1987 1988 1989 1990 1991 1992
 90.4 96.5 103.6 109.2 105.1 99.6
 -0- 07/07/92
 CONTACT: Debra DeCourcy of Mellon Bank, 412-234-5873
 (MEL) CO: MELLON BANK IN: FIN SU: ECO ST: PA -- PG005 -- X832 07/07/92
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Publication:PR Newswire
Date:Jul 7, 1992
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