Upstate New York’s economy continued a long run of stagnancy in 2019, with dim prospects for improvement in the near future.
That was the message from regional economists from the Federal Reserve Bank of New York who issued their annual assessment of the region Tuesday, noting a sharp divergence in job growth in the 48 counties it defines as upstate versus 14 other counties downstate.
While jobs grew at a 1.4% clip nationally from October 2018 to October 2019, and 1.3% downstate, upstate showed no expansion.
“Only in downstate New York has there been any significant job creation during the past year,” Federal Reserve economists said in their summary findings.
The wide difference between upstate and downstate performance continues a trend that has been apparent since at least 2010, according to numbers from the New York Fed.
Upstate-downstate divide Downstate job expansion grew 2.1% annually from 2010 to 2018, outpacing a national expansion that grew at 1.8% over the same period.
Meanwhile, upstate added jobs at an 0.7% annualized pace.
Even in the downstate area, economists warn there’s been a significant deceleration in job creation over the past year, sending some warning signs for the region that stretches from Ulster and Dutchess counties south to the tip of Suffolk.
“A variety of headwinds, including labor shortages and uncertainty related to trade, have contributed to this economic slowdown,” the economists said.
Weighing heavily on economic expansion, especially in the manufacturing sector, is uncertainty over trade policies.
Work shortage apparent Additionally, a severe worker shortage is hampering hiring efforts in several sectors, economists noted.
“Unemployment has been at historically low levels, even in markets where economic growth is sluggish, making it difficult for employers to find workers with the right skills,” the regional economists said.
“In fact, in recent months, a majority of both manufacturers and service firms in our region reported difficulty hiring workers due to a lack of qualified candidates.”
All upstate regions as defined by the New York Fed have seen declines in labor force since the 2008 recession, from as much as a 15% drop in Glens Falls and 14% in Elmira and Binghamton, to as little as 1% in Kingston, according to data from the state Department of Labor.
By contrast, the New York City labor force was up 4%.
Limiting upstate’s ability to attract business and grow employment are population losses that have been endemic across a wide swath of the landscape, the New York Fed said.
New York has lost 1 million people to other states over the past decade, according to the Empire Center for Public Policy.
“A big part of why upstate is stagnating is a decline in labor force,” regional economist Jaison Abel said during the briefing.
People leaving the state or aging out of the work force presents a critical challenge for upstate and represents “a headwind for the entire economy,” he said.
Housing prices rise There were some positive signs in the economy, however.
Economists noted rising home prices over the year – 6.8% in Binghamton, 5.5% in Buffalo, 4.5% in Syracuse and 4.3% in Rochester, versus 3.5% nationwide.
Those increases represent a turnaround for all regions, and in particular for Binghamton, where housing prices declined for the five-year period from September 2013 to September 2018.
Abel said reduced inventory of existing homes and a lack of new home construction upstate could explain the uptick.
© 2019 Star-Gazette
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