The Buffalo Niagara region has closed the gap on other U.S. metro areas in per capita personal income.
And while the region’s factory output is growing, its manufacturing job count has fallen off the national pace during the past couple of years.
Those were among the observations M&T Bank regional economist Gary Keith shared Thursday at a presentation hosted by World Trade Center Buffalo Niagara.
Keith offered a generally upbeat view of where the U.S. and Western New York economies are headed this year. He estimated the national economy was two-thirds of the way through its recovery from the Great Recession.
On the topic of personal income, Keith sees improvement locally. In 2012 – the latest available figures – the Buffalo area’s per capita personal income was 91 percent of the top 100 U.S. metro areas’ average, up from 82 percent in 2006.
“It makes us much more viable as a place to invest and put dollars to work,” he said. “I think we are getting more looks by folks from the site-selection world at what we have to offer. It’s up to us to hopefully continue this.”
How did the region manage to close the per capita income gap? Keith said a lot of it has to do with the Buffalo area suffering fewer job losses than other regions since the recession. In other words, while other regions were coping with more unemployment, local residents were continuing to earn paychecks, moving the Buffalo Niagara region closer to the national norm.
Buffalo Niagara workers average $20.54 an hour, versus the national average of $22.01, according to a July report from the Bureau of Labor Statistics.
The local manufacturing sector does not have the same momentum as do paychecks, though Keith sees signs of improvement.
Local manufacturing output is still below prerecession levels but has risen 10 percent since 2010, compared with a 14 percent increase nationally, he said.
Meanwhile, the region is struggling to keep up with the national average in manufacturing jobs. Going back to the start of 2007, the Buffalo Niagara region was losing manufacturing jobs at about the same pace as the national average through 2011. But in the past two years, as the national average moved up, Buffalo Niagara’s manufacturing employment has declined. Average U.S. manufacturing employment in January was 86.2 percent of its total seven years earlier; the Buffalo Niagara region’s percentage was down to 83 percent, a loss of 10,300 jobs.
Some of the local manufacturing job losses may have stemmed from the auto industry’s restructuring, including retirements, Keith said. And he said employment figures do not tell the whole story about manufacturing’s health, since technology upgrades enable factories to be more productive with fewer employees.
“We’re not much different than the rest of the country in that regard,” he said. “There’s a perception sometimes that you can’t be a manufacturer in upstate New York, Western New York; you’re uncompetitive from day one. And I don’t think that’s the case.” Manufacturers who operate here have found ways to overcome costs, such as higher taxes, by making their operations more efficient, he said.
“It’s disappointing to see 10,000 fewer jobs (over four years) in that sector, but I don’t see anything that says we’re not able to compete with anyone else that faces the same pressures in a really intensely competitive industry,” Keith said.
How can the region get its manufacturing job count to move up? “The trick will be if we can get into segments that allow to us to get more of a unique advantage,” such as the planned RiverBend high-tech manufacturing complex. The region also needs to capitalize on its manufacturing know-how, an asset that sets the Buffalo Niagara region apart from many other parts of the country, he said.
Other highlights Keith pointed to:
•The region’s Gross Domestic Product has risen 5 percent since 2008, nearly matching the 6 percent U.S. average increase over the same period. The region benefited from bypassing the boom-bust cycle in housing and by generating new jobs in education, health care, professional and business services, leisure and hospitality and retail trade, he said.
•Local firms’ exports are up about $2 billion, or 35 percent, over the past decade. Keith called international trade as a “big part of our recovery.”