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David Robinson: The stage is set for a more robust Buffalo Niagara rebound

It’s time to see whether the wave of big investments – from the Buffalo Billion to the expansion of the Buffalo Niagara Medical Campus – yields a bumper crop of new jobs and economic growth for the region.

David Robinson

The reseeding of the Buffalo Niagara economy is just about finished. Now it’s time to see whether the wave of big investments – from the Buffalo Billion to the expansion of the Buffalo Niagara Medical Campus – yields a bumper crop of new jobs and economic growth for the region.

So far, the results from all of the highly touted investments and marquee projects have been significant, but not a game-changer, for the region.

The most encouraging sign is in the region’s sizzling housing market, which is hotter than it has been in decades. With fewer and fewer homes up for sale, buyers are scrambling to pay ever-rising prices for the house of their dreams. It’s a telling turnaround that reflects the groundswell of optimism that has taken root across the region over the last four years or so, with sentiment finally taking a more optimistic turn after decades of pessimism and disappointment.

For decades, it was a buyer’s market when it came to housing. There were too many homes for sale as more and more residents moved away. And the buyers that remained weren’t convinced that buying a home was much of an investment. With home prices that have been among the nation’s lowest since the 1980s, buying a home was more about owning your own place to live, and less about it being a wealth-building investment, as it has long been in other parts of the country.

Now that’s changing. Local homes are starting to build wealth for the region’s homeowners. And new buyers are scrambling to get a piece of the action.

But the region still has plenty of room for improvement.

The pace of the region’s overall economic growth also has quickened, but it still lags behind the rest of the country.

Job growth has been a little better than average over the last few years, but in a concerning twist, the pace of employment gains slowed last year as the construction boom stemming from those big projects died down. Yet unemployment also has steadily declined, hovering around 5 percent, as the number of people actively looking for work has shrunk to just about where it was before the Great Recession began a decade ago.

Businesses are grumbling about how it’s getting harder to find qualified new workers, especially in skilled trades as aging baby boomers retire. State training programs are being bolstered to try to fill the gap, but a big hurdle still is convincing young workers and their parents that manufacturing – long viewed as a dead-end career in the years after the painful shutdown of the local steel plants and painful downsizing in the industries that remained – has become a viable career option again.

“There’s a couple of reasons that can cause this lack of job growth,” said John Slenker, the state Labor Department’s regional economist in Buffalo.

“One is a drop in business activity, which I’m just not seeing,” Slenker said. “The other is a shortage of labor. Once you’re at full employment, it’s very hard to grow unless your population is growing.”

And the Buffalo Niagara population isn’t growing. After decades of decline, it has stabilized – which is a positive development in itself. But the stagnant population means that the Buffalo Niagara region misses out on the rising economic tide that inevitably comes from having more and more people spending money, buying groceries, shopping for clothes and spending at restaurants and local businesses.

Economists, like M&T Bank’s Gary Keith, believe that the lack of population growth puts a lid on how much the Buffalo Niagara economy can grow. If the region is to break out of its current pattern of modest-yet-subpar growth, it needs to lure workers – especially young people – for good-paying jobs.

“We’re going to continue to add jobs, but basically only as fast as we add people,” Slenker said. “We need to expand our labor pool.”

That’s where the big investments in the Medical Campus and high-profile Buffalo Billion projects like the Tesla solar panel factory and the IBM technology hub come into play. If the region can create high-paying jobs that are lucrative enough either to persuade people to move here or get talented college graduates to stick around, then the renaissance could gain further steam.

With most of the construction on the Medical Campus wrapping up and with the Tesla factory slowly beginning to build its workforce, those economic seedlings are starting to sprout.

How strong they grow will go a long way to determine how long the Buffalo Niagara region’s rebound will last and whether the region’s good times will keep getting better.

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