(Credit: Luke Mosseau, 2022)
Jason Bram
Warren County lags behind the state and nation in economic recovery after the COVID-19 pandemic, economist Jason Bram told local business leaders at the Queensbury Hotel on Wednesday, Nov. 30.
Sluggish business activity, high inflationary pressures, rapid home price escalation, and a lag in all labor sectors except manufacturing, rounded out his take on the local business environment.
“While business owners and consumers expect high inflation over the next year, they don’t expect it to persist for a very long time,” Bram said to a packed ballroom at the Queensbury Hotel in Glens Falls. The Adirondack Regional Chamber of Commerce hosted the event.
Bram, an economic research advisor with the New York Federal Reserve Bank, produces one of the Fed's regional Beige Book reports. The beige books — named such because of the cover’s color — are monthly surveys of business owners and leaders in each region of the United States. The books can be thought of as the first measure of economic trends.
The economy will take about five years to get back to a 2% inflation rate, Bram said. He added that charting inflation is useful for businesses as they budget for the future.
“Once the country’s economy stabilizes, inflation will inevitably reduce,” he said.
Inflation coupled with soaring home prices made for a rough 2022 in Warren County.
Home prices in the county rose by 50% since the pandemic began, according to the Zillow Home Value Index.
“It’s no surprise that home prices have risen since the pandemic,” said Bram. “But a 50% increase over the last two-and-a-half year period is quite extraordinary.”
Since the start of the pandemic, the Leisure and Hospitality industry in the Glens Falls metro area has taken the hardest hit.
The city exhibited a 15% decline in its workforce for hotels and restaurants, dropping more than the state and nation, which fell by 10% and 5% respectively. These percentages are based on a Bureau of Labor Statistics study.
However, Mr. Bram remains optimistic about avoiding a recession due to continuous job growth and stubborn consumer confidence. He mentioned that wage growth and consumer sentiment in the region has kept pace with the nation, as businesses continue to hire.
Despite a need to hire, local businesses are still being held back by understaffing.
One example is Airway Meadows Golf Club in Gansevoort.
“We’ve had to resort to hiring 14 and 16 year olds,” said co-owner Joan Heber during the question and answer portion of the presentation. “We have to teach them how to be an employee, yet they still make the same minimum wage as the rest of the state.”
She added: “They work hard and we’re so happy to have them, but they have to go home at 7. So I hire a nice, hardworking 14 year old who's happy to get a paycheck, and my leagues come in to eat at 6:30…Who’s going to wash the dishes? It’s an issue. Minimum wage is the big question for Upstate New York.”
It’s not all bad, however.
A positive from the Bureau of Labor Statistics shows the average weekly wages in the region are still in line with the nation’s average. While the United States had a 13% increase in average wage since the pandemic, Warren County rose 11%.
With the idea that office space is on a continual downward trend, Bram offered a glimmer of hope for the region in terms of business footprint, or the amount of space a business occupies.
According to the beige book, more service and manufacturing firms in Warren County plan to expand their footprint over the next one or two years.
“The fact that more service and manufacturing firms don’t plan to reduce their space, I think offers a little bit of optimism on that very issue,” said Bram.
“Remote work is here to stay,” Bram said.
Service firms in the region responding to a New York Fed survey in August 2022 found that 21% percent of work was completed remotely, and expect 18% to be conducted remotely next year, Bram said.
There’s no doubt about a strong level of interest as President and CEO of Glens Falls National Bank Tom Murphy—who is also a board member of the Federal Reserve Bank of New York—remarked on the event’s impressive turnout: “We were a little nervous at the beginning about how many would come, but it’s obvious this is important to all of us as we plan for 2023.”
Clarification: One sentence in our story made reference to the amount of remote work is conducted. Our story made it sound as if the work was conducted in August. The a survey of work habits was conducted in August. We have made the change.