economy

Local Government Finances Will Remain Stable, Report Finds

An analysis issued this week by Moody’s found local government finances, primarily for towns and villages, will remain stable over the next two years.

But the report also raised concerns with upstate and suburban cities in the state that have stressed financial positions.

The report presented a stark contrast for municipal governments, with towns and villages holding stronger credit profiles, with generally more wealth and income and higher reserves, giving them more flexibility if tax revenue slows down.

Cities, meanwhile, have higher fixed costs and less flexibility. They’ve lost population and their reserves may make it harder for them to weather the next recession.

“New York’s cities of Rochester, Buffalo, Syracuse, and Yonkers will continue to face risks to their financial flexibility because their school districts do not have their own taxing power and rely in part on city payments to balance operations,” said Rob Weber, Vice President and Senior Analyst at Moody’s. “Towns and villages in the Metropolitan New York City region will tend to have stronger credit profiles than in other parts of New York, helped by more robust tax bases and economies.”

Those cities’ issues are compounded, too, by their school districts not being able to rely on their own taxing power to raise revenue, further stretching property tax power for a city.

Consumer Sentiment Drops In New York

The New York Index of Consumer Sentiment, a key indicator of how New York consumers feel about the economy, dropped by more than 6 points in the second quarter of 2019, according to the Siena College Research Institute.

The review found New York’s consumer sentiment fell to 87.1, and is more than 11 points below the national average of 98.2 in the second quarter.

“After three consecutive quarters of robust consumer sentiment, the New York index nose-dived falling over six points,” said Dr. Doug Lonnstrom, a professor of statistics and finance at Siena College the founding director of the research institute. “Despite remaining well above the breakeven point at which optimism and pessimism are balanced, every group – men, women, upstate, downstate, young and old recorded declining sentiment driven more so by their current outlook than by their future.”

The causes could be a mix of events in the news — tariffs, the trade war with China, financial volatility at the end of the year, but a shrinking a plurality of New Yokers believe they are better off financially today then they were a year ago, Lonnstrom said.

Meanwhile, Siena’s poll found 43 percent of New Yorkers surveyed say gasoline prices are having a very serious or somewhat serious effect on their finances, while 64 percent of residents say the amount of money they are spending on groceries is having the same impact.

NY Unemployment Rate Stands At 3.9 Percent

The state’s unemployment rate remained unchanged in April, standing at 3.9 percent after it was revised downward in March, the state Department of Labor said.

The state’s private-sector job count grew by 24,600 to more than 8.3 million, which was called a new all-time high.

“New York is open for business and the proof is in these numbers,” Gov. Andrew Cuomo said in a statement Our goal is to provide excellent employment opportunities across the state by bolstering our regionally focused economic development strategies and diversifying our portfolio through new and innovative industries.

“While we continue to set record numbers, we still have more work to do. New York must continue to build on our economic success by creating and retaining jobs to pave the way for future success.”

EJ McMahon of the Empire Center, however, pointed out that much of the job growth is being seen unevenly across the state as the April numbers show “a wide regional variation in private job creation rates around the state—and New York as a whole continues to trail employment growth nationally.”

43North Competition Launches Year 6

From the Morning Memo:

The sixth year of the state-sponsored 43North business competition is underway.

The competition is now accepting applications from start-ups across the world, which can win cash, incubator space, and support to grow their respective companies – provided they locate them largely in Buffalo, (more on this in a moment). Winners could receive as much as $1 million from a $5 million pot.

“Over the last five years, the 43North competition has successfully driven high-quality startups to Buffalo where they can grow their businesses,” Gov. Andrew Cuomo said. “Through this unique competition, we will continue to bring world-class talent and cutting edge businesses to this region to contribute and collaborate with the growing entrepreneurial economy.”

Winners are also allowed to operate tax-free for 10 years in the state under the Start-Up NY program. However, companies are only required to locate their CEO and half of their employees in Buffalo for a year, and the competition has faced criticism as some participants have decided to leave once that commitment was fulfilled.

The state said that over the first five years, the competition has created more than 400 jobs in Buffalo, and many companies have partnered with local institutions for continued growth. They also agree to give 43North a 5 percent equity stake.

“43North continues to be an important piece of the puzzle in attracting new businesses and talent to the region to help boost our local economy,” Assembly Majority Leader Crystal Peoples-Stokes, a Buffalo Democrat said.

“The $5 million startup competition supported by the governor and Empire State Development has also been key to giving minority and women entrepreneurs the opportunity to pitch their ideas and get the critical funding they need to get their businesses off the ground. I can’t wait to hear what new and innovative businesses and talent this latest round will bring the region.”

The competition said 27 percent of its winners have had female founders, and 20 percent have been founders of color. Startups have until July 8 to submit their applications.

Ag Census Shows Decline In New York Farming

A report released Friday by the U.S. Department of Agriculture found a decline in the number of farms in New York over the last five years.

The report, highlighted by the New York Farm Bureau, found there were 33,438 farms in the state in 2017, a decline of 2,100 since 2012.

It’s the largest drop in the number of farms in more than two decades and triple the national average of a 3 percent decline.

“The losses run the gamut, including a nine-percent drop in both the smallest and largest farms in terms of value of sales,” the Farm Bureau found. “New York also saw a nearly 20-percent decline in the number of dairy farms in the state. These losses coincide with nine-percent increase in labor costs, while some other production costs, like feed, gasoline and chemicals, declined. The average net farm income of $42,875 per farm is slightly below the national average.”

Meanwhile, farms are getting larger, a likely consequence of consolidation. The average farm size is now at 205 acres, an increase from 202 acres in 2012.

There are 6.8 million acres in production, down from 7.2 million five years previously.

The vast majority of farms in New York, 98 percent, are family owned. The average age of an agriculture producer is nearly 56 years old.

There was some good news for agriculture: There was a 35 percent increase in organic farms, growing from 864 farms in 2012 to 1,330 in 2017. Vegetable and fruit farms are also growing, while there was a 15 percent increase in maple operations.

Revised Labor Numbers Show Record-Low Unemployment In 2018

Federal government jobs numbers released Thursday found the state’s unemployment rate in 2018 fell to 4.1 percent amid a decade of job growth following the great recession of 2008.

New York’s unemployment rate in January was essentially unchanged from December at 3.9 percent. The national unemployment rate stands at 4 percent.

“New data from the U.S. Bureau of Labor Statistics show that the New York State economy continued to grow last year. In 2018, our annual private sector job count exceeded 8.1 million, a new annual high, and the state’s jobless rate reached 4.1%, a new record low,” said Bohdan M. Wynnyk, Director of the New York State Department of Labor’s Division of Research and Statistics.

Economists have pointed to the New York City area largely fueling the economic recovery amid a population boom. Upstate New York has over the last several decades struggled to retain jobs and population, meanwhile.

Gov. Andrew Cuomo touted the report, pointing to his administration’s efforts on economic development that’s focused on regional programs.

“These numbers are proof positive of the success of our long-term strategy of boosting economic progress across every corner of the state rather than in just a few regions, as has been the case in decades past,” he said.

“This success is bolstered by the strength of bottom-up, regionally focused economic development and transformative investments in infrastructure and new and emerging industries to support generations of future economic growth.”

Job Growth Surges In New York City, Driving Rest Of State

Jobs in New York City have urged since the end of the recession, outpacing gains made nationally and in the rest of the state, according to a report released Thursday by Comptroller Tom DiNapoli.

New York City’s boom is one of its largest expansions since World War II, with employment increasing by 18.9 percent between 2009 and 2017 — reaching 4.4 million jobs last year.

Overall, the city has been the key driving force behind job gains in the state, with nearly 75 percent of the increases made since the end of the last decade. Many of these jobs are in the financial and securities sector, but much of the growth has also been driven by health care, business services and tourism-related industries like restaurants.

The rest of the state is a different situation, however, especially in upstate New York. The report found the remaining jobs gains made since 2009 were largely seen in the immediate metropolitan suburban counties of Nassau, Suffolk, Westchester, Rockland and Orange.

rpt10-2018 by Nick Reisman on Scribd

As Amazon Says No Thanks, Erie County Plants Seed For Apple Pitch

If not Amazon, how about Apple?

Erie County Legislator Joe Lorigo, C, said he’s sent a letter to Apple Chief Executive Officer Tim Cook, inviting him to visit the region as the tech company begins its own search for a second campus. Lorigo’s announcement came shortly after Amazon released its list of 20 finalists for its second headquarters with a joint bid from Buffalo and Rochester not on the list.

“We made our pitch to Amazon in the last few months, unfortunately it was unsuccessful according to news today, but now it’s time we make our pitch to Apple. When one door closes, another opens. This isn’t the old Buffalo. We think big and we take our shot. I know what our community has to offer. I’m confident we can compete with any city big or small in the country,” Lorigo said.

Apple’s plan to create a 20,000 new jobs is not quite as grand as the Amazon plan, which is promising up to 50,000 positions, but it will likely stir a similar frenzy among mid-to-large sized American metropolitan areas. Lorigo said Erie County is getting an early start.

“I’ve already begun to reach out to other elected officials and our regional economic development agencies to make sure we have a plan in place. When opportunities like this arise, we have to work together to make the best possible pitch,” he said.

The economic development agencies may be able to build off of the plan they put together for Amazon. They said while the rejection is disappointing, the proposal highlighted a number of features that could attract companies to WNY including low operating costs, ease of travel, and an extensive university system.

“Overall, this joint effort yielded much information regarding how our two communities can work together to promote our region to future suitors and top-tier talent throughout the world,” the presidents of the Buffalo and Rochester agencies said.

Unemployment Declines To 4.8 Percent, But Jobs Decrease

The state’s unemployment rate last month declined from 4.9 percent to 4.8 percent, though the state’s private-sector jobs count decreased by 11,900 in October.

The number of unemployed New Yorkers fell by 1,900, according to the Department of Labor.

“New York State’s unemployment rate fell over the month, from 4.9% to 4.8%, due to an expanding labor force and a decrease in the number of unemployed. Additionally, the state’s economy has added more than 98,000 private sector jobs over the past year,” said Bohdan M. Wynnyk, Director of the New York State Department of Labor’s Division of Research and Statistics.

The decline comes after several months of increased unemployment rates in the state.

The national unemployment rate stands at 4.1 percent.

New York Unemployment Rose In September

The unemployment rate in New York increased last month despite a hike in the overall number of private-sector jobs in the last 12 months, the Department of Labor said on Thursday.

New York’s unemployment in September rose to 4.9 percent, up from 4.8 percent in August, growing from 4.7 percent in July.

New York’s private-sector job count grew by 1.1 percent, or 84,400 jobs, year over year.

“Despite today’s preliminary job report, when looking over the past year, New York State’s economy has added more than 84,000 private sector jobs and experienced historically low statewide unemployment rates,” said Bohdan M. Wynnyk, Director of the New York State Department of Labor’s Division of Research and Statistics.

The national unemployment rate is 4.2 percent.