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Central New York Economy Report
8/26/08 - Central New York's economy continues to grow, despite the threat of a national recession. A combination of a diversified industrial base, a healthy local housing market, and aggressive recruitment efforts by local employers should help to insulate the region from the full-blown effects of any national slowdown. However, a protracted U.S. recession would adversely affect the regional employment base, especially among goods-producing industries.
Region Grows
Between February 2007 and February 2008, the private sector job count in the Central New York region rose by 2,900, or 1.0 percent, to 294,600 -- its highest February level since 2001. Local over-the-year job growth was double that of the nation (+0.5 percent) and matched the state's rate of growth (+1.0 percent) over the same period.
Broad-based local job growth continued, with most industries adding jobs over the year. Two consistent performers are professional and business services and educational and health services. A growing reliance on jobs requiring technical, science, computer, and math skills helped to boost employment at professional, scientific, and technical services firms. Hiring has been particularly robust at local nursing and residential care facilities, in response to an aging population base.
The largest over-the-year job decline was in manufacturing, which continues to be the Achilles Heel of the regional economy. The job count at Central New York factories is at a record low for February. Recent layoffs at auto parts maker New Process Gear contributed to these losses.
Despite these job reductions, there is plenty of other good news from local high-tech manufacturers. Bitzer Scroll, a German maker of air conditioning and refrigeration compressors, will create 289 high-end engineering and manufacturing jobs when it opens a facility at the former General Motors plant in Salina. Lockheed Martin's Maritime Systems & Sensors Systems group recently held a job fair to hire 150 workers with engineering and project management skills. Medical instruments maker Welch Allyn plans to break ground this spring on a $30 million expansion and renovation project that will add 175 jobs over the next five years. GE Inspection Technologies in Skaneateles Falls recently moved 165 existing employees into a new manufacturing facility, and expects to add another 50 high-tech jobs over the next five years. G.A. Braun Inc., a maker of commercial washers and dryers, will move to larger quarters at Hancock Air Park in Cicero and create 40 new jobs over the next three years.
Housing and Labor Supply
The area's stable housing market and labor force are key forces that help to keep the local economy strong. The National Association of Realtors recently singled out Syracuse as an example of a healthy real estate market that is bucking the national trend of falling prices and slower sales. While the Syracuse market did not enjoy the spectacular price run-up that affected many other areas of the country between 2000 and 2005, it has avoided the subsequent crash that occurred in many of those same areas. Moreover, the local market has been relatively steady since then. In 2007, the number of units sold in greater Syracuse increased by 0.1 percent, compared with a 12.8 percent decline in sales nationwide. Similarly, the median price in Syracuse increased by 3.5 percent in 2007, while the U.S. price dropped by 1.4 percent last year.
A combination of slow population growth, increasing numbers of baby boomers retiring, and fewer young people entering the local job market have contributed to a tightening labor supply in Central New York. If these trends continue, local employers will have great difficulty filling positions, which could hamper future job growth. In response, the region's employers are aggressively advertising to fill vacancies at various skill levels.
Entry-level workers, employees with specialized technical skills, and highly skilled professional workers are all in demand. There are just not enough new workers entering occupations like carpenters, nurses, engineers, and machinists, which have led to persistent shortages.
Summary
Recent good news in the Central New York region far outweighs the bad. Diversified job growth, a balanced housing market, and aggressive recruiting by local employers in the face of a shrinking labor supply have all helped to propel the local economy.
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by Karen Knapik -Scalzo, Associate Economist, Central New York
Excerpted from the April 2008 issue of the Employment in New York State newsletter.
