New York Businesses
Expect Stronger Economy in 2006
High cost of energy slowed statewide economic growth in 2005, according to UAlbany's Econometric Research Institute
Contact: Catherine Herman (518) 437-4980
ALBANY, N.Y. (January 26, 2006) -- Industries throughout New York expect stronger growth in employment, wages, sales, profits and bonuses for 2006 than in 2005, according to the University at Albany's Econometric Research Institute (ERI). The report, The New York State Establishment Survey, also concluded that higher energy costs as a result of the rising cost of oil and Hurricane Katrina diminished expectations for economic expansion in 2005.
"New York is slowly but surely catching up to the rest of the nation when it comes to optimism about its economy," said Kajal Lahiri, Distinguished Professor of economics at UAlbany and director of ERI. "Ever since 9/11, the outlook has been poor for the overall health of the state economy, particularly compared to the rest of the United States. But current data suggests that trend is finally reversing, particularly in New York City."
Lahiri noted that government regulations, labor costs and local and state taxes are still the primary concerns of smaller firms throughout New York. A tight labor market has nearly half of the survey respondents indicating difficulty in obtaining skilled labor, while 20 percent indicated problems finding unskilled labor.
Overall employment between April and November 2005 was strongest in New York City and weakest in Western New York. Profit growth for 2005 is now expected to be smaller than anticipated in April in all regions, with only New York City, the Hudson Valley and the Capital Region anticipating larger profits than in 2004. However, all regions except Western New York are expecting more growth in profits in 2006 than in 2005, with the Capital Region and the Hudson Valley expecting the strongest growth.
"The Capital Region has traditionally outperformed the rest of New York in profit growth and has been more optimistic in economic outlook, going back to 2002," continued Lahiri. "But while optimism has remained steady locally, it continues to rise in other parts of the state, such as in New York City, the Hudson Valley and Long Island."
Read the complete report.
About the Econometric Research Institute
Established in 1981, the aim of the Econometric Research Institute (ERI) is to conduct quantitative research on economic forecasting, transportation economics, business cycles, international growth, and health economics. Since 2000, it has been conducting a bi-annual Survey of New York Business Establishments. ERI disseminates its research findings through scientific publications, seminars and conferences. In conjunction with the Economics Department, and with grants from the Ford Foundation/CGE, it offers a graduate certificate in economic forecasting. For more information, visit the Econometric Research Institute web site.
About the College of Arts and Sciences
The University at Albany's College of Arts & Sciences is the largest academic unit at the University. It provides the general education foundation of the undergraduate curriculum and is the intellectual base for study in a wide variety of disciplines at the undergraduate and graduate levels. The College's programs promote critical thinking and reasoning, aesthetic sensibility, and intellectual development, while providing career preparation to help students meet the challenges of the future and achieve their goals.