Chamber unveils economic forecast

CNY Business Journal (1996+), Jan 24, 2003 by Bartlett, JoAnn

SYRACUSE-The overall economic future for Central New York, and more specifically Syracuse, is one of both caution and optimism, according to the Greater Syracuse Chamber of Commerce 2003 Economic Forecast released at its annual luncheon. Approximately 480 members of the business community attended the event on Jan. 17 at the Oncenter, said Constance B. Maute, the chamber's director of research and economic development. Douglas Holtz-Eakin, chief economist for President Bush's Council of Economic Advisors and a Syracuse University professor, was the keynote speaker.

"This is not your father's or your grandfather's recession," said HoltzEakin. "Real income continues to grow. Personal consumption is growing and the business sectors have to catch up." He said the nearly 80-percent growth in electronics and technology is due to better business practices and sees the stability of consumer prices and inflation as positive.

"The growth of the 1990s is the foundation of the future," he noted.

The chamber's economic-forecast report analyzes several sectors, including construction and real estate, utilities and telecommunications, professional services, government, finance and insurance, retail, high technology, manufacturing, health care, and education.

Construction of new homes is anticipated, and some neighborhoods will see speculation buying as the city prepares for DestiNY, according to the report, Wireless communications should see growth, but technology security remains an issue in the field of utilities and telecommunications. The report suggests there will be continued mergers in the field of professional services, with the overall look "cautiously upbeat." The government faces a large deficit for the state, which could affect the area locally. Those in the financial and insurance industries will focus on corporate responsibility, smaller profit margins, and continued growth with modest expansion, mainly through mergers. These fields will face tougher regulatory requirements in the wake of last year's debacles in very large corporations.

In the retail sector, sales remain flat and companies are working with smaller profit-margins, the report states. Manufacturers continue to focus on training and retaining good employees, instead of adding new jobs. Productivity continues to increase, as new orders for products increase. Health care continues to suffer with more demand for nursing homes, es, lack of staff, and lower profits. Higher educational institutions continue to grow in areas of teaching emergency services and security services, and continue to adapt to the changing technology by creating "smart" classrooms. Public schools from kindergarten through high school seek collaboration with the communities they serve to provide a better education for youths.

In addition to giving an outlook on the future, the chamber also presented a past look at the local economy. In October 2001, there were 357,100 people on area payrolls. This past November, that number changed to 355,500, a decrease of 1,600. In the manufacturing sector, jobs decreased from 46,600 in 2001 to 43,400 in 2002. The economic indicators show the unemployment rate currently at 4.5 percent, is a 0.3 percent-increase from the same period last year. The current labor force is 361,500 (5,500 more than in 2001).

Annual retail sales are more than $8.54 billion. The median household effective-buying income is projected to increase about 2 percent, and the number of building permits for new homes has decreased from 1,156 in 2001 to only 543 by June of 2002.

Syracuse experienced a slight decrease in non-agricultural jobs between 2001 and 2002 at 0.2 percent. Rochester shows 1.4 percent, while the Buffalo-Niagara Falls region shows 0.5 percent. Service jobs in the Syracuse region are at an all-time high, topping out at nearly 295,000, according to the report.

In addition to Holtz-Eakin, other speakers also shared their economic overviews, mostly focused on DestiNY USA. David Cordeau, president of the Greater Syracuse Chamber of Commerce, said that the DestiNY project will have a positive impact on the area. Michael Lorenz, spokesman for The Pyramid Cos., DestinNY's developer, also shared this sentiment.

Timothy Ahern, of Ahern, Murphy & Associates in Syracuse, said the area has "a strong, vibrant, economy" and DestiNY continues to keep national focus on Syracuse and the surrounding region. "We are entering the dawn of a new age of business leadership," Ahern stated.