Fed official: Upstate economy doing better than nation's

In a reversal of roles, Upstate’s economy is doing well compared with the rest of the nation, but it is still facing serious challenges, the president and chief executive officer of the Federal Reserve Bank of New York said Tuesday in Syracuse. “Upstate is actually outperforming the nation as a whole,” said William Dudley during a stop here on a...

In a reversal of roles, Upstate’s economy is doing well compared with the rest of the nation, but it is still facing serious challenges, the president and chief executive officer of the Federal Reserve Bank of New York said Tuesday in Syracuse.

“Upstate is actually outperforming the nation as a whole,” said William Dudley during a stop here on a swing through Upstate that was to also take him to Rochester and Buffalo.

The region, including the Syracuse area, did not experience the housing boom that much of the rest of the nation did, he said. It couldn’t, because its lack of population growth would not support it, he said.

But that turned out to be a good thing when the housing markets in many other regions went bust and took their economies down with them, Dudley said. Upstate’s housing markets did not go bust with them, he said, so its economy has not suffered as much during the recession.

“You were not dependent on housing as a driver of economic growth,” he said.

The Syracuse area gained 2,500 private-sector jobs in September, compared with the same month last year. And its unemployment rate of 7.5 percent last month was significantly below the national jobless rate of 9.2 percent.

But the news is not all good for the area, said Dudley, who was a partner and managing director at Goldman, Sachs & Co. before stepping into the top job at the Federal Reserve Bank of New York in January 2009.

Manufacturing continues its long decline in the region, he noted. That fact, combined with stagnant population growth, “makes is hard to have a strong, dynamic economy,” he said.

Nevertheless, he said the presence of many colleges and universities has given the region a highly educated work force, and the research dollars they attract present partnership opportunities for businesses interested in commercializing new technologies.

“There is a lot of raw material here for growth,” said Dudley.

Dudley does not agree with those that say the area’s economy cannot thrive on the service sector jobs that are rapidly replacing lost manufacturing jobs. Financial services, tourism and the medical industry are examples of service sector industries that are bringing dollars into the community, he said.

“You can go a lot further on the service side than people think,” he said.

He has not given up on manufacturing playing an important role in the area’s economy, however. Dudley said low valued-added manufacturing will continue to disappear, but that high-value, specialized manufacturing has a bright future.

“There will be manufacturing, but it will be manufacturing on the cutting edge,” he said.

Contact Rick Moriarty at rmoriarty@syracuse.com or (315) 470-3148.