How Central New York is Poised for Growth

From rising job numbers and wage growth to transformative capital investments by small business owners and major employers, this episode of Talk CNY explores why Central New York is poised for economic growth — more in the next three years than the last 16 in terms of GDP growth. 

In this episode of Talk CNY, presented by NBT Bank, host Katie Zilcosky is joined by Jess Abbott, Vice President of Member Engagement, and Jared Shepard, Director of Research and Planning at CenterState CEO. Together, they unpack the economic momentum propelling Central New York forward.

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Transcript

0:00

This is Talk CNY, a semi-monthly podcast by CenterState, CEO. We're an independent nonprofit committed to creating inclusive, equitable, and sustainable economic growth in Central New York. Join us as we meet the people and explore the projects driving the regional economy forward. On this episode of Talk CNY,"Our economy is going to grow more in the next three years than it did in the past 16." This is Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, Director of Communications at CenterState CEO and your host for Talk CNY. The macro economy undoubtedly impacts us all, but it's not always easy to make sense of how the data impacts Central New York businesses. In this episode of Talk CNY, presented by NBT Bank, we're going to take a look at that data through the lens of our members' experiences. Joining me for this discussion is CenterState's Vice President of Member Engagement Jess Abbott and Director of Research and Planning Jared Shepard. Jess, Jared, thank you so much for being here today. Thank you. Thank you. To start off, Jess, you are a part of the Member and Business Experience team, and Jared part of Strategy, Policy and Planning team. Can you tell me a little bit about each of your roles and then how your work intersects?

Jess: 1:15

Sure. I guess I can start since I think our work kind of works broadly across all the portfolios. The Member and Business Experience team is really here to act as a liaison between the needs of our business community and the doing here at CenterState. So we listen very closely to what they need to, whether it is visibility, advocacy, connections, support, and then we work to make sure that we provide them with the programs, partnerships and connections needed for them to succeed.

Jared: 1:41

The Strategy, Policy and Planning team works, as a member organization, we work with all of our membership on defining strategy for the organization, but also through our economic planning and economic initiatives. So we support that through a lot of research on industry and economic data. We do things like look at our industry clusters on the planning side of things. We take a fairly direct role in assisting our members and assisting other people in the community on planning issues when it comes to development. And also have a role that a lot of what we'll talk about today, which has to do with looking at trends both in our regional economy, looking at the national economy, and then I think really importantly, talking about how our region is experiencing trends in the national economy and what's different about what's going on in Central New York.

Katie: 2:39

So a very natural fit between the two of you kind of working together to see how members are experiencing the data in real time. Before we get into what the data is like today in present time, I want to start at the beginning of the year. CenterState at the beginning of the year releases its Economic Forecast Report. At the beginning of the year, it was something like 73% of those who responded to the survey expected their business to do better than it did in the year before. Have a good or excellent outlook in 2025. What does that optimism tell you, and how does it compare to the national picture?

Jared: 3:15

As our respondents look back at 2024, 53% of them described their business opportunities as above average or excellent. Looking ahead to 2025, the same group of people, 73% answered the same way. So there's a 20-point bump there of this natural sometimes optimism in the entrepreneurial community. But in the case of Central New York, there was a lot of foundation for that optimism, certainly with announcements about major investments and the growth that we all are looking at as anticipated growth is in there. But behind that was 77% of our members anticipated that increased sales and revenues in 2025 would...supplied that optimism and 65% thought that innovations in their productive capacity would also drive that.

Jess: 4:15

Yeah, I would say when you speak to the entrepreneurial piece, the first thing that comes to mind is Lindsay Mastrogiovanni with Conscious HR. She has worked in HR for most of her career and started a business to be able to provide fractional HR services to some other companies. But most recently, just a couple weeks ago, we celebrated the opening of her downtown office. And so when I was talking to her about it, I'm like, you chose to come downtown. It's a beautiful space, and it's open for co-working. She said that for her entrepreneurial optimism is making long-term investments and not just people, but places. And so it was important to her to be a part of the ecosystem down here and also to be able to have a space for other maybe entrepreneurs who are feeling that same sentiment but aren't quite there yet to work out of. But when you think on some of the larger scale investments that you're talking about, you can look at TTM, you can drive down Fly Road and see that the new campus, the shell is up, the sign is out there and they're getting ready to start to begin the process of bringing on a huge labor investment in 400-ish new really great jobs working with our workforce development team. So you can look at it from both that entrepreneur optimism, but also in some of the larger investments as well.

Katie: 5:26

I want to dig into a little bit of the data that is spurring this optimism in the region. So jobs, wages, new businesses in the region. These are all data points that we track and look at and analyze to kind of give us a better picture of what's going on in Central New York and the national economy. So Jared, I will turn to you as the director of research and planning. Tell us a little bit about the jobs numbers right now. The wage growth numbers right now and the new business numbers.

Jared: 5:57

The overall trend of jobs in our region has really been steady growth over the last few years, but we also look on a more recent timescale. The year-over-year jobs number that came out for April showed over 5,000 more jobs this April than we had in the previous April. So that was I think the strongest number in Upstate New York or in the state just for that period. So that doesn't capture everything going on in the economy, but at least that snapshot was positive. Our wage growth year-over-year is almost 4%, and we've also seen a lot of growth in establishments. So the number of businesses in our region is at, its over 19,000 and right now we're at the last time it was that high was 2016, and we also have a lot of job openings. So all of the trends about business growth, establishment growth, hiring wages have consistently over a sustained period, say the last five years or so been positive.

Jess: 7:17

Yeah, we've been working really closely and by we, I am co-opting the hard work from our workforce development team of which I get to participate in, but we're working very closely with a lot of the larger employers that have planned and projected needs for hiring and trying to work with them to aggregate that data in advance of the needs so that we can work to bring some of our on-and-underemployed neighbors into that workforce. So it's nice to be able to have such good partners that are willing to share that so that we can all be part of the planning. Because to Jared's point, we have a lot of job openings. We have a lot of people that are on-and underemployed and there's more of that to come. So that's been a nice partnership that we've done in a lot of our manufacturing spaces and construction spaces and are working on developing some actual true data tracking and program, which I know you'll love and program tracking for that as well.

Katie: 8:08

Another data point I want to hit on is consumer sentiment. How are consumers feeling about the economy spending their money? So what is that looking like right now? And then what does that look like? How is it playing out in our business community?

Jared: 8:23

So one of the first headline macroeconomic numbers that came out this year that was a bit of a surprise was the GDP number for this first quarter, which was negative, and certainly that's something that plays into consumer sentiment, right? Fairly quickly after that, we started getting announcements about on-again or off-again tariffs. This also contributed to some uncertainty in consumer sentiment. So we track that, and we were looking at a couple of the surveys that show month-to-month how consumers feel about the economy. Coming out of that, it's starting to become clear that the spending behavior isn't really closely tied to that. Some of it might be, but the sentiment is really what was most sensitive. But going into May recently, actually just this morning, the Census Bureau had consumer spending numbers that were down by nine-tenths of a percent. So a little bit of a pullback in consumer spending. How that eventually plays out and how that works into possibly the labor market is a factor. The other way, of course, it goes the other way and the resiliency of the American consumer has always been pretty strong. As long as unemployment stays pretty low, it's very low in Central New York. It's about 3%, which is lower than the national average and lower than New York State. Typically in the U.S. if the American consumer has a job, they have money and they're spending it.

Jess: 10:03

Yeah, I would say in some of our retail spaces, we've seen, to your point, consistent if not slightly improved spending in the first quarter, which was a little unexpected, but likely tied to, again, some of the uncertainty we keep speaking to, which is maybe some pre-buying in advance of potential tariffs and things of that nature, but no stoppage of the foot traffic. And also, as always, our community is great at adapting. And so a lot of the tenants that we're seeing going into some of the buildings with our friends at Core Development are leaning into experiential establishments so that it drives consistent foot traffic as well. So there's been an adaptation and an adjustment, but

Jared: 10:47

I conveniently left out the pre-buying part of what was going on with tariffs. I was one of the pre-buying panickers and asking that we make a lot of toilet paper purchases, and ...

Jess: 11:00

I was going to let that be our secret. I was. Yes. Katie: I was not going to tell anyone, Jared. Jared: I could start the panic, guess, but I have all of the paper towels. Katie: We are going to take a quick break here, but first, a quick word from our presenting sponsor, NBT Bank. At NBT Bank. We know that this day starts with this one. This day starts with this one because no matter how unforgettable the extraordinary days are, there's a lot of everyday that leads up to them. You can count on NBT Bank to help you get started. NBT Bank, it starts here. Katie: This is Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, Director of Communications at CenterState CEO, and your host for Talk CNY. We are here today with Jess Abbott and Jared Shepherd. Thank you both for being here. Thank you. Thank you.

Katie: 12:00

Before the break, we were talking about the details about specific data and how members are responding or feeling that data. I want to broaden it a little bit and talk about just general sentiment. I mean, Jess, when you are out in the community talking to members, what are they saying about the economy? How are they feeling, and what are they responding to?

Jess: 12:20

Yeah, I mean, I think I kind of have the best job because I get to work with several hundred members across a breadth of industry size of business. And so it really allows me, I have all the data from my colleague Jared here, but I get the anecdotal and real-life tie into it. And overall, I'd say it's a pretty positive forward momentum. We've talked about some of the reasons why, but there is still a lot of ways you can mark that, such as a lot of hospitality openings, service industry, which really speaks to a strong confidence in the local market, but also the uncertainty that we mentioned. We haven't really seen a huge impact from the costs across all industries as it relates to tariffs. But there are high interest costs and there is the uncertainty of the tariffs. And so as a result, some of the projects that might be in larger housing projects or mixed-use buildings, everything's right there. It's just slow because of the uncertainty of maybe the developers or some of the funding. I think the momentum is good and strong. We've seen it in some of our partners projects, but there is still that uncertainty as we move forward.

Katie: 13:29

Yeah, I mean, it sounds like it's more the uncertainty than the actual economic function going on right now.

Jared: 13:36

Yeah, the persistent uncertainty is the Fed's buzzword for this year. I think it probably applies for the past several years even. But locally again, there is more direction. And then getting back, we like to get right back to economic 101 fundamentals. We frequently get requests for economic formulas for those.

Katie: 14:05

It's one of our many jobs here at CenterState CEO.

Jared: 14:07

Yes, because some people forgot to memorize them.

Katie: 14:10

And of course, you have them all memorized.

Jared: 14:11

All of them at the expense of precious childhood memories.

Jess: 14:14

And please don't ask him to start repeating them because he will. Katie: So, we'll get to the next question. Jared: So here's a quick one. No, the production function is labor and capital. And in going back to the Economic Forecast, in addition to just optimism, which is great, our members told us that they had plans to make investments both in labor and capital. So now we're a quarter into this year, and as Jess was saying, there's more economic data out there than you could possibly need. A lot of it's very important. Sometimes there's a lot of noise versus signal. At CenterState and the work we're doing and the work that Jess is doing, we can actually look at what the numbers are saying, but also talk to our members and know at a very granular, high-frequency level what our members are doing in terms of investment in labor or capital. I would say Startek, for example, they have a huge investment plan to bring lot of all their divisions under one roof. But then in addition to that, they are planning an innovation room for training and they're planning to bring on 10 to 15 new hires. I think of some of these are larger businesses, but I think of like Zach Primo, he runs a sign business and he was saying that for him, he's planning a capital investment and a fairly new business because he is seeing so many new businesses and events that are taking place. So it's just interesting to see that no matter where you are in the market or the size of your business, we are seeing those planned capital advancements. And it's also a broader region. It's not just right here in downtown Syracuse. It's not just in Onondaga County. I think of Menlo Micro. And they have a fairly large planned investment for volume production because they see that despite some of this uncertainty, that there is a need for them to be ready to meet the moment and so that's something that's coming along this summer.

Katie: 16:16

So there's a national economic narrative of uncertainty, like you said, the Fed's buzzword. But here we've mentioned it and I think it's come through in a lot of these stories. There's more optimism. What is giving that optimism direction?

Jared: 16:30

We've done so much work, and by I mean everyone who's been doing the work other than me for many years up until this point, and continues to do that work on developing a dynamic business environment. So there's job growth and establishment growth. So one of the numbers that we mentioned earlier in the podcast was talking about the growth of establishments. That's a real number of, there are more businesses in operation now than there were two years ago. So we have the seeds of growing new businesses. Certainly, the INSPYRE Innovation Hub is a continuation of that. Another aspect of a national macroeconomic factor that's sort of playing into what we're seeing here based on some of our conversations and experiences is a trend of investment and development in the south in the Sunshine States. Some of it has been overbuilt. There's negative rent growth in some of the headline superstar cities. And one of the things we've been able to see over... a time series on is having attended housing conferences and knowing that a few years ago we were at these conferences, there was familiarity with of course, the Micron announcement, but not a sense that developers or investors were yet getting shaken loose from their usual markets. A year later, we were in Atlanta for the same housing conference, and the discussion was about, it was actually fairly consistent about looking for markets that had some population growth above average, above the U.S. average job growth and had strong public administration supports and some rent growth. And that really well describes exactly what's going on in Syracuse. So consistent with that is inbound calls, connections with outside investment, connections with outside developers who have to put us on their list of sites and are actively weighing our market against competitor markets and weighing us so far pretty favorably.

Jess: 18:56

And to that end, I always have to give credit to my colleagues because of people that I get the good fortune of working with. But something like what Jared mentioned, housing, I'm sure in other conversations people have heard us talk about it because it is an urgent and emergent need to address. But what I love is that we are bringing together people from all aspects of how to address that. So our housing work group, for example, brings together who you would consider developers, builders, architects, but we also have financial institutions. We also have some people who provide consulting services. We have Erie Materials, for example. They're a huge provider of exterior building materials, and a lot of their products are USA-made, but they are noticing that things like interest rates or perhaps oil prices might delay lead time or distribution. And so it's just imperative to have everybody's input into this because they're actually fine with their on-hand inventory. But to your point earlier, some of these programs are a little bit slowed or these projects, excuse me, are a little bit slowed. And so who they might distribute these materials to aren't quite ready to take them on. So if we don't have all those perspectives in one room, then we can tend to miss a moment that we can lean in. So, I give you a lot of credit for that. Jared: Okay, I'll take it. Katie: So, we are more than halfway through 2025, first half of the year nationally defined by uncertainty, here in Central New York, directional optimism. But what's the rest of the year looking like? What should people keep an ear out for? What should they know to look for when they're looking at economic data throughout the rest of the year?

Jared: 20:43

The key thing is on the national scale, and I think for anybody is the consumer behavior, the May number that just came out, some of that baked into that was the even uncharacteristically poor weather in the Northeast that kept people from taking as many trips, possibly. And also what we talked about, some of the initial buying of stuff ahead of tariffs may have also crowded out some buying in May. If the labor market stays where it is and consumers keep buying, that's a good thing. We also expect that the forecast for interest rates, there was a Fed meeting today, but it's likely to stay pretty close to the same, but there might be some easing in 2026 or close to it. That's at least where the forecasts are. That certainly will help address some of the deals right here in Central New York that interest rates and construction costs are holding up. It won't need to be a lot. And in fact, just in the last few weeks, I think we can even start to pivot from talking a lot about, we have this fantastic pipeline of proposed residential units. I think 12,000 proposed units is like $4 billion of proposed residential development in New York. We've talked about that for a while as really being stuck. I think now we can use different language. I was at a groundbreaking yesterday on East Genesee Street of a 285 unit mixed-income mixed-use development. So that's unstuck. The market's there, the construction costs are good, the deal pencil's out. So I think some of the reasoning is in the forecast, but also some of the economics of projects. The strong demand that we have means that we're going to see. And we also have other tools that CenterState's actually helping to develop to bring more capital into the market. What it will mean is more groundbreakings, more units of housing. We have to go from permitting a few hundred units of housing a year to several thousand. And when we first started talking about that, it didn't seem like a very realistic number. Last year, the permit data was over 1500 permitted units. So now we're not talking about orders of magnitude changes. We're talking about we're making progress. We're helping deals get done. The economics of deals are getting better. So I think it's more construction and more investment, more local investment and outside investment and more preparation for the growth that we all know is coming. And more and more people around the country know is coming to Syracuse in addition to all the residential pipeline that we see, which as you were saying already, that's getting unlocked. There's going to be more groundbreakings like we've been having recently. But then continuing forward, keeping in mind that our economy is going to grow more in the next three years than it did in the past 16 in terms of GDP growth into our regional economy.

Jess: 24:20

Yeah, and I would just say anecdotally, we are so fortunate to live and work in this community because this is a resilient community and this is a community that comes together. If you've been in any meetings with me, you would be sick of hearing me say the word coopetition. But I am forever fascinated by the way that our business community will come together sometimes with what would be considered competitors or sometimes an unlikely duo to try to find solutions to some of the things that we've discussed today. And I think that itself speaks to the optimism because everybody is willing to come together to better the region that we love and work in. And that's the best part, I think.

Katie: 24:59

Well, Jess and Jared, thank you both so much for being here today. Thank you. Thank you. CenterState CEO's podcast Talk CNY, presented by NBT Bank, is available on all major podcast platforms or centerstateceo.com. Additional content and clips can be seen across CenterState CEO's social media channels. For new episode reminders, be sure to subscribe in your favorite podcast listening app and don't forget to leave a quick review or five-star rating. Thanks for listening to Talk CNY, presented by NBT Bank.