Category Archives: Economic Outlook 2023

By Sen. Dan Stec

As state lawmakers head into the 2023 Legislative Session, we must chart a better direction for our state and communities. Years of neglect and poor state planning, combined with the aftermath of the pandemic, have led to an exodus of New Yorkers from our state and fewer opportunities for existing residents and business owners to prosper. 

Given the uncertain economic outlook nationwide, it only makes sense for New York state to offer small businesses some sorely needed financial breathing room by reducing the taxes and fees that drive up costs and make it harder for them to stay open, much less grow and develop. During a time of increased energy and supply costs, it’s incumbent upon state government to not exacerbate these problems.

Last year, the state comptroller released an audit on the Department of Labor’s unemployment insurance assessment surcharge. It revealed that billions in improper payments from businesses and overpayments to New Yorkers were issued, due to poor oversight and an antiquated system. 

This is deeply troubling, and I’m looking to remedy this situation moving forward. First, we must take steps to shore up the infrastructure and operations at the DOL to ensure further waste and fraud is prevented. Offering financial remuneration to small business owners for their overpayments, which only exacerbated the economic difficulties they faced during the pandemic and its aftermath, is also essential. 

The Adirondack Regional Chamber of Commerce (ARCC) has selected Marc Yrsha as chairman of its board of directors for 2023.

ARCC also announced the addition of four new members to its board of directors in 2023. 

Yrsha is executive vice president and director of relationship banking of Glens Falls National Bank & Trust Co.

“The ARCC plays a critical role in our region by championing the needs, ideas and goals of our business community. I am very appreciative of the opportunity to chair this great board of highly engaged volunteers and work alongside the tremendous team at the ARCC,” Yrsha said. 

“Together, we will continue to be the local leader supporting, educating, advocating and delivering for the members of the ARCC and our business community. Thank you to all the members of the ARCC. We appreciate you,” he said.

“The ARCC is so fortunate to have a board that is dedicated to the organization and our business community. We are grateful for past board members’ service and excited to welcome on our new board members. We can achieve so much together,” said ARCC President and CEO Tricia Rogers.

The new board members are Ray Agnew, Bill Moon, Paula Traina and Daniel W. Washburn.

Agnew is vice president for hospital and community engagement at Glens Falls Hospital, taking on that role in February 2020. Previously he served as vice president for college advancement at Paul Smith’s College. For 14 years he also served as vice president for community relations of Glens Falls Hospital and executive vice president of the Glens Falls Hospital Foundation.  

by Kenneth J. Entenmann

This past year has been a volatile one for the economy and the financial markets. The main factors that drove uncertainty in 2022 remain the same as we enter 2023—the stubbornness of inflation and its effect on the Fed’s interest rate policies, and the looming threat of economic recession and its impact on corporate earnings. 

All are interrelated.

The main catalyst of uncertainty has been the persistent and pervasive nature of inflation. In response, the Federal Reserve Bank has embarked on an historically aggressive monetary policy change that has quickly and significantly increased interest rates. This change in monetary policy clearly dampened economic activity. The first and second quarter GDP were negative (-1.6 percent and -0.6 percent) while the third quarter GDP rebounded to 2.9 percent. The economy limped into year-end and overall GDP growth will be modest, at best, in 2022. For 2023, the consensus forecast for GDP growth is sobering, with a 60 percent-plus chance for a recession in the first half of the year. 

In the post-COVID economy, it was hoped that inflation would be “transitory.” Unfortunately, inflation continues to remain problematic heading into 2023. The good news is inflation, as measured by the Producer Price Index (PPI) and the Consumer Price Index (CPI), appears to have peaked. PPI peaked at 11.7 percent in March and was 7.4 percent in November. CPI posted a peak rate of 9.0 percent in June and was 7.1 percent in November. 

Both indices have declined every month since their peaks. While this trend is encouraging, inflation remains far above the Fed’s 2 percent target. There continues to be three primary drivers of these pessimistic inflation expectations: supply chain disruptions, commodity prices and labor issues. While some of these factors have improved, others still are a significant concern. 

by Mark Shaw

The economic outlookfor 2023 is the dreaded R word—Recession. 

It`s here. We know the media and our government are not exactly forthcoming saying it’s here, but if you are a consumer you see the change. Technology is often the canary in the coal mine. When tech companies start cutting jobs, that is when we see things starting. 

Amazon, Facebook, Twitter, and just a few days ago Salesforce, recently cut their workforces. Additionally, the news was just released that the financial sector cuts are coming. These two major driving economic forces are the first to start the layoffs. Next up, all of us.

But as a small business owner there is some comfort in the fact that you can probably find some places to cut costs and save money. Ideally, you have probably been doing this all along as the inflation numbers have grown. When it comes to your technology, if you currently have an IT staff, even if it’s just one person, you can use some cost-effective, time-tested methods to meet your needs. 

In today’s world you can outsource your information technology for often a fraction of the cost of retaining a fully loaded employee. Multiple studies shown that firms with 1-10 IT staff members have seen significant savings by outsourcing to an IT consulting firm. I have first-hand experience of the best ways this can and has been done.

By Jim Siplon

Economic development is in the midst of major change. So is our region.

We can no longer focus exclusively on attracting employers. We’re also focused on attracting more people. Warren County and many communities like us are engaged in a war for talent. If we bring great people here, local employers can grow again, and other opportunities will follow.

When asked to step in after the sudden passing of Ed Bartholomew in mid-2020, I assumed the role was focused on attracting, retaining, and growing local business. In short, economic development in the traditional sense. 

What I’ve learned is that achieving sustainable local economies and communities requires those things but so much more. We need analysis, strategic planning, and tactical execution in a wide swath of areas that exceeds and underpins the traditional approach.

Our communities and many of our businesses are struggling to adapt to a future with fewer workers, an aging population, and new stresses on our traditional assets. Significantly, the birth rate locally and nationally has not resulted in enough new workers to replace those who are retiring since the early 1970s. 

Because our local population is older on average than the rest of the nation, New York state and the Capital Region is experiencing this  sooner than other areas. Warren County’s average age is 48. To put that in context, New York State is 39 while the nation is 38 and those are viewed as problematic.

By Assemblyman Matthew Simpson

The year 2023 presents an opportunity for the state of New York to put the COVID-19 emergency era governing behind us. The biggest priority for lawmakers in Albany this year will be to undertake a fundamental shift from responsive governing and pivot to rebuilding a foundation which allows New York families and businesses to thrive. 

  We need to acknowledge the elephant in the room: The state’s population loss is a big deal. Stability and prosperity are easy goals to talk about but if the people don’t see a viable path towards success, they will seek it elsewhere. From 2021 to 2022, New York saw a reduction of 180,000 citizens. 

According to the Internal Revenue Service, the state’s share of this country’s millionaires has also declined from 12.7 percent in 2010 to 8.9 percent in 2020. Why should we pay attention to this? A large percentage of the State’s revenues generated from personal income taxes come from a proportionately small group of high earners. 

The top 1 percent of earners in New York whose bottom dollar figure begins at around $656,000 contribute 46 percent of the State’s income tax revenues. Additionally, the mean household income from those who left during the last Census was in excess of six figures. Fiscal policy relying on politically charged maxims like “tax the rich” is not a sustainable path. 

By Sara Mannix

Many business leaders are predicting a recession to come our way soon, and the majority of those we have spoken with are at least preparing for an economic slowdown in 2023. 

You wouldn’t think this would inspire positive vibes, right? 

Not necessarily. If there is one thing that I have learned about economic downturns, it is that when they happen, those who invest in marketing are usually the ones that come out of the recession the strongest.

This is true for both of Mannix Marketing’s focuses: digital marketing and tourism marketing.

The digital marketing industry has been growing since the 1990s, and that should continue into 2023. As always, businesses will need to invest advertising and marketing dollars where their customers are – and now more than ever that’s online and on apps.

From SEO to PPC to social media marketing, industry leaders know that during economic dips they need to focus on their core business and their people. They will partner with marketing experts to handle the digital marketing. Failure to successfully market during these times can be devastating to companies for several reasons, including a) losing customers and market share during the recession and b) not being ready when the economy starts buzzing again.

By Doug Ford

What a wild and crazy year 2022 turned out to be. I for one went into 2022 optimistic after coming off the COVID experience and thought we were headed back to a more stable business climate. 

I could not have been more wrong and I’m sure many others would say the same. Being part of the construction industry for more than 46 years I can attest it was the most challenging year of my career for many reasons, labor being the biggest factor. Unfortunately, many of those same challenges will carry over into 2023.

 According to the National Association of Homebuilders (NAHB), the housing industry will likely see a double digit decrease in 2023. Locally it may not be as bad, but down from the past few years. Multifamily construction remains strong both nationally and locally and that trend will likely continue into 2023. Remodelers remain active with a backlog of work to complete partially due to the country’s aging housing stock.

As we start the new year the big question is what’s lies ahead? There are many opinions, and the signals are mixed much like the previous year. Inflation continues to be a major concern fueled by ongoing supply chain snarls brought on by pandemic stresses as well as the Russia/Ukraine war. 

As a result, prices jumped on key construction materials significantly and getting them was even more challenging. In my opinion, supported by many industry experts 2023 will continue to be plagued by many of the same challenges we encountered in 2022 as stated before. However, as the forecasted housing demand softens, we should start to see the supply chain and pricing stabilize. 

By Gina Mintzer

Last year was quite a year to live, work and play in the Lake George region as we emerged from the pandemic, yet still reeling from various side effects.  

Looking ahead for 2023 we are planning for much of the pre-pandemic typical cyclical business highs and lows that the tourism industry realizes due to seasonal travel patterns and annual events, yet still on guard for staffing and supply chain challenges and managing what we can for the best outcomes for our businesses, employees, and the community at large.  

As we know, the tourism sector is crucial to our Lake George regional economy. The health of this industry affects all who live in the area, whether directly working in hospitality or not. Tourism dollars spent in the area help to offset the local tax burden by thousands of dollars each year. A robust tourism sector also means more attractions, dining, shopping and more to offer to residents as well.

 The collaborative efforts that began among many cross-sections of our business community have continued to make our region stronger, nimble and safer. As customer service will continue to be a strong focus of business, we will see more focus on in-house training as each guest, for lodging, dining and retail are more important than ever to keep our business sustainable. 

Based on successes of 2022, we are kicking off the year with major winter happenings. 

By Tom Albrecht Jr.

As we enter 2023, we cannot forget to look back at 2022. Hilltop Construction was able to have one its best years in its 46-year existence despite facing challenges. These challenges presented in leadership changes, inflation, material price increases, and labor costs.

The main issue in construction last year was the inflation of material costs to the housing markets. According to many sources inflation in the construction industry increased by over 14 percent for 2022. 

The projects were still coming in fast and furious even though inflation was sky rocketing. We noticed that we had to turn down many projects in 2022 due to costs, driving projects over budget. I would say it was the first time in many years that we were faced with these decisions.

The past several years the area seemed to be focused on labor shortage, Hilltop has done a great job at retaining over 30 employees. 

My concern moving into 2023 is that labor costs will continue to go up due to lack of new workers entering the construction field. Moving forward we need to encourage more students into entering construction industry.  According to the National Association of Home Builders, construction sector jobs in the U.S. increased by 248,000, a 3.3 percent increase since November 2021. We don’t have 3.3  percent of kids graduating high school or college that are going into the construction sector. This is scary going into 2023 as the labor shortage is going to continue to get worse.

In 2023, we will see material prices start to correct themselves by the second or third quarter. I believe the first six months of 2023 we will see a slowdown in construction projects. As the fourth quarter of 2022 just ended, we have already seen a shift in the number of projects we are getting calls on.