By Vicki Pratt Gerbino, CEcD
Economic developers are optimists by trade. In our metro area, which includes both Warren and Washington counties, we have every reason to believe that 2013 will be a stronger year for job growth.
Our area is tracking positively for job growth, and our unemployment numbers are going down. We’re closing out 2012 with unemployment rates lower than the State average.
What should we look forward to? Unemployment rates for the year have historically been highest in January; and we suspect this will hold true for 2013 as well. Many workers in our region follow a cycle of employment/unemployment marked notably by the strength of our summer recreation/entertainment season, followed by retail employment through the Christmas holiday shopping season.
When the seasonal retail employment is over, many in our workforce migrate to unemployment until late spring/early summer. Many people in our region choose this employment cycle as a lifestyle.
EDC Warren County met with representatives from almost 100 businesses in 2012, from existing business entities, from businesses we hope to attract; and with people businesses’ hire to help them make investment decisions that are geographically-focused. We call those people “site selectors.”
Here’s a sampling of what we heard:
There has been an overall resistance to make large capital investments for the past few years with business opting to “do more with less.” However, many are at the point where “less” is no longer sustainable. The result is that several of our businesses will make new investment decisions in 2013.
Manufacturing jobs are growing in the Capital District region, and particularly in the Albany-Schenectady-Troy area. Some reports suggest that the total number of net new manufacturing jobs at the end of 2012 exceeds the number at the end of 2007 – immediately preceding the national recession.
Manufacturing jobs are significant ‘multiplier’ jobs. Many of our region’s manufacturers have a global supply chain and efforts are on-going to reduce transportation costs related to product coming in to the facility. We are seeing increased efforts to purchase locally (within a one-day travel time). This trend should have a positive impact across upstate New York.
How does an increase in manufacturing jobs in Troy affect Warren County? Beyond the impact of the regional multiplier effect of payrolls; many regularly purchased consumables are locally-sourced (within 100 miles).
As payrolls increase in the mid-section of the Capital District, Warren County businesses with a 100-mile radius customer base, have enhanced sales opportunities. Data trends over the past five years suggest that while the overall number of jobs in the manufacturing sector for Warren County has declined, the average annual wage has steadily increased. We anticipate very modest growth in direct manufacturing jobs in Warren County in 2013.
Machines running (versus idling) in one manufacturing plant always means more work for other businesses in proximity. This ecosystem that is dependent upon one thing: someone is buying the product being manufactured. As long as someone is buying, the ecosystem works and people inside the plant and out are working.
Working people are paid and they spend that payroll. We anticipate growth in indirect jobs affected by investment in manufacturing in 2013. In other words, manufacturing will continue to make investments that increase productivity and enhance efficiency which allows the business to remain competitive, keeping payroll multiplying in our region and supporting businesses that support their manufacturing operations.
Our outreach efforts suggest that we can anticipate job growth in Warren County in the following industry sectors in 2013:
• Administrative and support services
• Professional and technical services
• Trade, transportation and utilities
• Ambulatory health care services
• General merchandise stores
• Leisure and hospitality
• Amusements/gambling and recreation
• Accommodations
• Food services and drinking establishments
Tracking growth in both population and jobs in Warren County over time suggests growth in the above sectors; however, the types of jobs ultimately created will be dependent to a large degree, upon the type of population growth.
As with manufacturing, the services industry is an ecosystem deeply affected by the type of population growth. Warren County is experiencing growth of people aged 45-plus, and a decline in people ages 5-44. The trend is consistent with growth in health care and retail businesses and to some degree, with growth in professional and technical services as well.
Although it is only January, EDC has already added two new project opportunities to its pipeline for 2013. We anticipate a busy year and continue to sing “Let it snow, let it snow, let it snow.”