The strength of Saratoga County’s local economy can be measured by looking at several indicators, including activity within the housing market and employment numbers, while also taking into account some of the trends taking place at the national and
global levels.

“One thing that I’ve learned over time is that it’s very difficult for New York State, or for any region of New York State, to really not be impacted by what’s going on in the national economy,” said Hugh Johnson, a nationally-renowned expert in economic forecasting with offices in the Capital Region. “But that’s not to say that policymakers in Saratoga or what’s going on with GlobalFoundries won’t make a difference.”

GlobalFoundries and the high-tech industry sector have contributed to Saratoga’s relatively low unemployment numbers – 5.9 percent according to the Federal Bureau of Labor Statistic’s most recent data, as compared to an 8.6 percent unemployment rate nationally.

“Luckily here in our region, we have that stabilizing effect of being a center for government employment, education and medical jobs as well,” said J. Shelby Schneider, director of marketing and economic development specialist with the Saratoga Economic Development Corporation (SEDC). “It’s also been a traditionally conservative area, so for example, when everyone else experienced the big housing boom, we didn’t have as much in Saratoga County.”

Therefore, when the housing bubble burst in late 2007, Saratoga was certainly hit, but not as hard as other areas in New York and other states, such as California, Nevada, Arizona and Florida.

“The big swings in the housing market that occurred throughout the nation did not occur in New York State generally, and not in Saratoga,” said Johnson. “Housing conditions are slightly improving. We’re bumping along the bottom, but we’re not deteriorating.”

The housing market can be broken down into three distinct sectors: new construction, the resale of existing homes, and rental properties. Of the three categories, new construction has been the hardest hit.

“Everything that’s happened goes back to credit,” explained Barry Potoker, executive director of the Saratoga Builders Association. “It goes back to whether the banks are lending the money for builders to build homes and whether they’re lending it to people to buy new homes. All of that is what I would say has been the main cause for slow growth in new construction.”
The reasons for slow resale rates are a bit more complicated to understand.

“Resales are sort of a conundrum. Borrowing rates are so low, almost at 1960s levels,” said Potoker. “It has picked up over the course of the last couple of years, but I think it goes back to the fact that cash is just not easily available.”

However, Johnson noted that with the Federal Reserve promising to keep short-term interest rates low, mortgage rates will likely remain low and attractive, with affordability getting better and better with each passing day.

“The problem is that in every part of the country, Saratoga included, there’s an enormous inventory of overhang from foreclosures,” said Johnson. “And that’s sort of keeping the lid on prices. But there are some signs that that’s starting to be relieved.”

One promising indicator can be found in the housing market’s third sector: rentals.
“The demand for rentals has been pretty strong,” said Potoker, pointing to new apartment projects being built in downtown Saratoga at Market Center and another development in the works along Weibel Avenue.

But once again, when comparing Saratoga’s numbers to the rest of the country: “Actually, Saratoga’s numbers look better than New York State and the nation as a whole. The point is, if you measure it by the unemployment rate or by almost any other measure, Saratoga is going to do better than the nation and better than the state. And that’s the good news,” said Johnson.
Johnson predicts Saratoga County will see a 1.2 percent increase in the employment growth rate for 2012, following what he predicted would be a .8 percent growth rate in 2011. The numbers aren’t huge, admits Johnson, but they’re not so bad either.

“Saratoga is keeping pace with the growth rate of state employment, and is likely to do somewhat better in 2012. We’re not talking about strong growth. But it is growth,” said Johnson.
As well as keeping an eye on the national economic landscape, Johnson cautions Saratoga residents to pay attention to the public policy decisions coming out of Europe regarding their economy.

“Europe is the X-factor in all of this,” said Johnson. “There are companies in Saratoga that do business in Europe, and there are enormous risks associated with the European economy. [These businesses] are going to get banged around a little bit.”

Ultimately, Saratoga seems to be fairing the economic recession better than most areas across the country. But the battle is far from over.

“What we’re doing with GlobalFoundries and other high-growth industry sectors – the stabilizing factor is good,” said Schneider. “But in order to see some real economic expansion, we do have to dip our toes in the water with some of these higher-growth, slightly riskier industry sectors.”
According to Johnson, Saratoga can expect 2012 to hold, “slow growth, but not great growth.”
Johnson will be sharing his views on the global, national and local economy January 18, 2012, from 7:30 – 9:30 a.m. at the Hyatt Place Saratoga/Malta. The event is reserved for members of the Chamber of Southern Saratoga County or SEDC. The cost is $20 per person, and includes breakfast. To reserve a seat, call (518) 371-7748.
To join SEDC, call (518) 587-0945.