NY metros’ weak GDP growth

by E.J. McMahon |  | NY Torch

All 12 of New York State’s metropolitan statistical areas had economic growth rates below the national average in 2016, according to newly released federal data.

Real Gross Domestic Product (GDP), an inflation-adjusted measure of overall economic output, increased by an average of 1.7 percent for the nation’s 382 metropolitan statistical areas last year, the federal Bureau of Economic Analysis (BEA) reported. Nationally, BEA said, the 2016 growth in real GDP by metropolitan area ranged from a high of 8.1 percent in Lake Charles, Louisiana, and Bend-Redmond, Oregon, to a low of -13.3 percent in Odessa, Texas.

Buffalo-Niagara Falls led all New York metro areas with real GDP growth of 1.3 percent, good enough for a national ranking of 188. This marked an improvement over the Buffalo metro area’s slower growth between 2011 and 2015, the data indicate. Albany-Schenectady-Troy’s growth rate of 1 percent ranked second highest among New York metros, or 213th nationally. The New York-Newark-New Jersey area had real GDP growth of 0.9 percent, ranking third among areas wholly or partially within New York State.

The professional and business services sector, up 2.7 percent, was the leading contributor to average growth nationally. In the Buffalo area, however, growth occurred almost entirely in the finance, insurance, real estate, rental, and leasing sector, which contributed nearly 1.2 percent of the net 1.3 percent growth. This was roughly in line with the U.S. metro average, BEA figures indicated. Counter to the national trend, Buffalo area’s professional and business services sector had slightly negative growth (-0.01 percent) last year, the BEA estimated.

At the other extreme, five New York metro areas—all upstate—actually contracted last year. The largest of the shrinking metros was Rochester, where the change in economic output was -0.2 percent. Since 2011, the Rochester area’s economic output is down a net 0.1 percent, the five-year data indicate.

Ranking near the bottom of the list for all areas, nationally and in New York, was Elmira, whose real GDP was pegged at -3.8 percent last year. Only 17 metro areas nationwide had bigger decreases in economic output. Elmira had the same near-bottom ranking from 2011-to 2016, when its real GDP change was -9 percent.

All 12 of New York’s metros also grew at rates below the 10.9 percent average for all U.S. metros from 2011 to 2016, with real GDP actually decreasing for half the state’s metros during the five-year period.  Albany-Schenectady-Troy was the only upstate area to achieve even half the U.S. metro growth rate.  Buffalo, the largest upstate metro, had a 2011-16 real GDP growth rate of just 2.5 percent across the five-year period.

Here’s a table showing one-year and five-year real GDP growth rates in New York metro areas.

 

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.