The New York Fed also conducts the Empire State Manufacturing Survey to learn about conditions for regional manufacturers. I am pleased to say that November’s report (issued this Tuesday) shows signs of stabilizing after five months of weakening. In November, more manufacturers are adopting an optimistic outlook. Like many other large states, New York has a bifurcated economy. New York’s downstate area differs dramatically from the upstate area in terms of industrial composition, occupations and job growth. While Albany may be geographically midway between the two areas, its industry mix resembles neither the downstate’s heavy concentration in the service sector, nor the upstate focus on the manufacturing sector. What sets Albany apart is that it is home to the state’s capital. About one quarter of employees in the Albany area work for the government – about a third more than the statewide average. The local economy did not fare as poorly as the national economy during this recession, but the impact was still severe and the recovery is not yet well established. During the downturn, the capital region saw a loss of about 20,000 jobs, or roughly 4 percent of total employment, considerably less severe than the 6.5 percent nationwide decline. Over the past year and a half, job losses have slowed. But, in contrast to the rest of the state, we cannot confidently say that a solid recovery is underway. The Albany area is not yet consistently adding jobs. This is not surprising, considering the fiscal difficulties faced by New York State.
Households in the Albany region did not accumulate as much debt as did households in the rest of the state and country during the run-up to the crisis. Recent data indicate that the average adult in Albany has about $ of debt, which is about 20 percent lower than the average across the state and country as a whole. Thus, financial strains on many families in the Albany area were lower than in many other places around the state and nation. However, the number of delinquencies did rise significantly during the recession in the area, so it is clear that some households face strong financial pressures. About 4 percent of debt balances currently are 90+ days past due in Albany, which is twice the 2 percent delinquency rate in 2005. Although this is less than half of the rate in New York State or the nation, this doubling of delinquencies in the Albany area still troubles me as a sign of heightened distress for many families here. Stepping back from the current challenges, the capital region possesses a number of fundamental strengths. These strengths show through in some key ways:   Albany is growing. The recent Census shows that the population in the region expanded by 5.5 percent over the past decade, more than double the statewide average. Saratoga County saw an especially strong gain of nearly 10 percent.   Incomes in the region are high. Albany is the state’s most affluent area outside the New York City metropolitan region.