The mission of Western New York Economic News is to provide analysis and forecasts of economic trends in the Buffalo-Niagara Falls Metropolitan Statistical Area and contrast these trends with those in New York State and the nation. The newsletter is prepared by George Palumbo, PhD and Mark Zaporowski, PhD, members of the Economics and Finance Faculty at Canisius College, Buffalo, NY.
E-mail your comments about the newsletter to palumbo@canisius.edu.
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2nd Quarter 2008
Since the last issue of this newsletter, the BEA earnings report for the year 2006 has been released. This report has historically served as the basis for our projection of the region’s income change and the relationship between the regional and national economy. Western New York continues its painful transition away from the high earnings, goods producing sector to the generally lower earning elements of the service providing economy. The effects of this transition are seen throughout the region in changing relative values for income, consumption, property values, real property and sales tax collections.
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1st Quarter 2008
This issue of the Western New York Economic News focuses on the deteriorating national economic outlook and its significance to the region. Many analysts are placing a high probability on the occurrence of recession in 2008 as a result of the dissipation of the housing bubble, problems in the sub-prime mortgage market and the ensuing credit crunch. National labor markets have begun to deteriorate as the national unemployment rate reached the 5% level in December for the first time since November 2005. Oil prices have hovered around $100 a barrel and inflation has accelerated consistently since August and is presently running at 4.1%. The Federal Reserve has attempted to allay the fears of the market by pumping liquidity into the marketplace and reducing interest rates. How much more they can loosen monetary policy without placing upward pressure on inflation presents a conundrum for the Fed. Since the local economy has had a history of leading the nation into recession, staying in recession longer and recovering less fully, these national developments are extremely worrisome for local residents.
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3rd Quarter 2007
The national economy has recently suffered a credit crunch resulting from dissipation of the housing bubble. The crunch was severe enough to cause the Federal Reserve to intervene by reducing both the discount rate and their federal funds rate target. Whether or not the credit crisis will ultimately push the economy into recession is yet to be determined. If it does, Western New York is likely to feel the effects of recession before the national economy, remain in recession longer and recover less fully than the nation as a whole. This is demonstrated by viewing employment in the upstate cities of Buffalo, Rochester, and Syracuse over the past two decades. By the end of 2006, employment in these upstate cities had not yet returned to their pre-2001 recession levels. Employment in the high income generating goods producing sector has continued its secular decline in each of these cities.
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2nd Quarter 2007
Since the last issue of this newsletter, the BEA earnings report for the year 2005 has been released. This report has historically served as the basis for our projection of the region’s income change and the relationship between the regional and national economy. Western New York continues its painful transition away from the high earnings, goods producing sector to the lower earning elements of the service providing economy. The effects of this transition are seen throughout the region in changing relative values for income, consumption, property values, real property and sales tax collections.
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1st Quarter 2007
The accelerating decline in energy prices is benefiting both the national economy and the Western New York economy. And while the decline in high paying goods producing sector continues in Western New York, there has been an increase in real earnings per worker between 2002 and 2004 in the three upstate metropolitan areas. Details in the January 2007 Western New York Economic News.
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3rd Quarter 2006
While declining energy prices sources could boost the national growth rate thereby benefiting Western New York, the declining employment in the high paying goods producing sector continues. Average weekly earnings for private sector employees in the Buffalo, Rochester, and Syracuse metropolitan areas continue to decrease in real terms and are as low as at any time since the 2001 recession. This report looks at the data.
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2nd Quarter 2006
The most recent economic statistics reveals that Western New York continues its painful transition away from the high earnings of the goods producing sector to the lower earnings of the service providing economy. The effects of the transition can be seen in the region’s changing relative values of income, consumption, property values, real property and sales tax collections.
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1st Quarter 2006
While the national economy continues to recover from the 2001 recession, employment growth is occuring in the lower wage sector but not the higher wage sector. This is one factor contributing to the fiscal deterioration of local governments in Erie Country as well as much of upper New York State.
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3rd Quarter 2005
While the national economy has rebounded from the 2001 recession, the upstate metropolitan areas of New York continue to decline in goods producing employment and earnings per worker. Using new data from the U. S. Department of Labor, this edition of the newsletter compares the declines occurring in Buffalo, Rochester, and Syracuse.
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1st Quarter 2005
While the national economy is in full recovery, the local Western New York story is quite different. The region continues to lose high earning goods producing jobs replacing them with service providing jobs that pay substantially less per worker. Once again, the region leads the nation into recession, falling deeper, staying longer, and recovering less fully. It is time to change the methods that we have followed to get to this position.
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3rd Quarter 2004
While the national economy seems to be on the rebound, the upstate metropolitan areas in New York State continue their decline in goods producing employment and earnings per worker. The declines in the goods producing sector, all too common in the upstate economy over the last two decades, may be spreading throughout the national economy. Recent changes to NAICS from the older SIC coding system has led to a new series of employment and industry measures for employment that has been incorporated in the newsletter.
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2nd Quarter 2004
The recent release of the BEA earings report for 2002 and a revised New York State Department of Labor report reveals that employment declines in the Western New York region again preceded those for the nation during the 2001 recession. The region appears to have fallen deeper into recession and recovered less fully than the rest of the nation. Moderating economic downturns will be at the cost of trading high wage jobs for those that pay substantially less.
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1st Quarter 2004
Fiscal stimulus, accommodating monetary policy, and a weakening dollar may be beginning to trigger an economic expansion on the national level. But in the Western New York region, the continued decline of the historic driver of the economy, durable goods employment, remains a concern. Moreover, the possibility of a jobless recovery at the national level does not bode well for the local economy.
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3rd Quarter 2003
The emerging national economic recovery has been accompanied by substantial weakness in the labor market, lost jobs, and rising unemployment. This is of special concern to Western New York with on-going restructuring leading to a loss of high wage manufacturing jobs, particularly in the durable goods sector. The stunning losses in manufacturing employment in Rochester since the end of the 1991 recession shows a region in transition to a lower standard of living.
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2nd Quarter 2003
New data shows that Western New York is not escaping past patterns of cyclical decline where declines are steeper and recoverys are weaker. The challenge this presents to the economic development community is examined.
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1st Quarter 2003
For the first time since the 1973-1975 recession, the Western New York region seems to be emerging in better condition than the national economy even though its unemployment and earnings reflect the national average. But if there is a significant reduction in durable goods activity, this could create economic dislocations reminiscent of the 1979-83 recession.
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3rd Quarter 2002
The issue of the news letter explores the impact that a double dip national recession can potentially have on the Western New York economy. Evidence from 2001 recession shows that the Western New York economy has outperformed the nation as a whole. This is due to the region's dependence on the automobile sector which has continued to do well throughout the 2001 recession.
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2nd Quarter 2002
Recently released statistics are used to examine the recent past and the near-term future of the Western New York economy. And a brief reflection on the role of Adelphia and economic development in Western New York.
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1st Quarter 2002
This issue examines the impact on Western New York of the national economic contraction that was already in evidence before the events of September 11.
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3rd Quarter 2001
This issue examines the impact on Western New York of the national economic contraction that was already in evidence before the events of September 11.
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2nd Quarter 2001
An economic analysis of the metropoliitan areas of Buffalo-Niagara Falls, Rochester, Syracuse, Binghamton, and Albany using U. S. Department of Commerce May 2001 data, and relationship of these areas with the state of the U. S. economy.
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1st Quarter 2001
An examination of the past patterns of economic growth and contraction in the nation and upstate New York focusing on western New York. What do these patterns tell us about the relative timing and the severity of a recession on western New York?
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3rd Quarter 2000
This issue of Western New York Economic News analyzes the May 2000 Personal Income data for the Buffalo and Rochester metropolitan areas published by the Bureau of Economic Analysis of the U. S. Department of Commerce. Forecasts of the growth rate or personal income are developed. Employment trends for Buffalo, Rochester and the U. S. are also examined.
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Winter 2000
Compares and contrasts the economic trends of the rust belt cities bordering the Great Lakes and examines how Buffalo is doing in comparison with these cities.
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Summer 1999
May 1999 personal income data is used to examine the long term trends in the growth rates of personal income and employment across major metropolitan area of New York State.
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Spring 1999
An examination of taxes and other fiscal factors in New York State versus the nation and a comparison of Erie and Niagara Counties to the rest of New York State. The conclusions are quite different than what many would expect.
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Fall 1998
A careful examination of how the Western New York economy has changed over the past few decades.
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