G-20 in Pittsburgh; economic impact

By Fester:

The big local news is that Pittsburgh will be hosting the G-20 economic summit on September 24th and 25th.  I am mildly skeptical of the claims that this summit will lead to a massive burst of net new economic activity in the region because this will be a high import/highly self-contained and high disruption event. 

Hotel reservations will be gobbled up by summit attendees but they will be displacing normal business travellers as well as any other potential conventions that could have been occurring at the same time.  The net impact will be much less than the gross impact.  The same will apply to the restaurants, the caterers, the cleaners and the strippers who will be providing services to the summit goers.  Most of the high value add functions of international summits will be taken care of by the Washington metro economy so there will be little positive spin-off there. 

If this summit is anything like any other recent G-8 or G-20 summit, the security will be massive.  Downtown Pittsburgh is a very small region with only a few natural entry points and very high job density.  It is extraordinarily likely that Smallman Street, Penn Avenue, Liberty Avenue, 6th, 7th and 9th Street Bridges as well as the 16th Street bridge will be severely restricted or closed.  My normal morning bus stop is 150 yards from the summit site.  That area will most likely be inside the security perimeter.  Downtown will be massively disrupted.  I have already submitted a vacation request for those two days.  It is likely that many downtown businesses will not be open during the summit.  Normal spending will not occur, and it may be replaced to some degree by summit spending, but the per capita local lunch spending has to be an order of magnitude higher for several thousand summit goers instead of the 130,000 normal downtown workers. 

So the combination of typical activity displacement, opportunity cost and massive security disruptions will make most probable estimates of economic impact be far less than the hopes of local officials.