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PITTSBURGH INDEX STUMBLES IN MARCH

 PITTSBURGH INDEX STUMBLES IN MARCH
 PITTSBURGH, May 14 /PRNewswire/ -- The Mellon Index of Economic


Performance for the Pittsburgh metro area, which gauges the overall economic vitality and momentum of the region, suffered its biggest decline in over a year, dropping 1.6 percent in March as a result of widespread softness among the index components.
 Housing permits led the March weakness, dipping to an annualized rate of 5,000, which although still respectable, is down sharply from the 7,000 pace average of December and January. In addition, each of the employment indicators -- goods-producing jobs, service-producing jobs and the manufacturing work week -- posted modest declines during the month.
 The March Index drop serves as a reminder of how hard it is to translate an upturn in housing and retail sales into broadly-based expansion and job creation. To date, the moderate and narrowly-focused pickup has come at a time when businesses are still heavily engaged in restructuring and cost-cutting, which together with normal early recovery period caution, are limiting job formation.
 Since the pre-recession peak of June 1990, the Mellon Index for Pittsburgh has fallen approximately nine percent. All components, except housing permits, are down from their 1990 levels. Contract awards for commercial construction, which remained remarkably steady through the summer of 1991, have plummeted for the last nine months. Manufacturing jobs and the average factory work week have been cut significantly during the downturn, but fortunately, not as severely as in previous recessions. At the same time, service-producing employment has been trimmed by 3,000 jobs, reflecting cuts in retailing and government.
 Looking ahead, there is room for cautious optimism. Some of the major imbalances and structural problems that have retarded the national economy's efforts to recover, are slowly being corrected. This provides some additional assurance that the U.S. economy will sustain the current upswing. In this environment, the Pittsburgh area is expected to show an improved economic performance over the balance of the year. The return to a stronger housing market and a better pace of retail sales should help boost the region in the coming months. Local manufacturing firms will benefit from a strengthening of the national economy.
 In March, the Mellon Index of Economic Performance for the Pittsburgh metro area stood at 100.9, down from 102.6 in February.
 MELLON PERFORMANCE INDEX FOR PITTSBURGH
 March
 (1980 equals 100)
 1986 1987 1988 1989 1990 1991 1992
 87.6 87.7 94.5 103.1 108.8 104.6 100.9
 -0- 5/14/92
 /CONTACT: Debra DeCourcy of Mellon Bank, 412-234-5873/
 (MEL) CO: Mellon Bank ST: Pennsylvania IN: FIN SU: ECO


CD -- PG005 -- 0040 05/14/92 08:57 EDT
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Date:May 14, 1992
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