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M&T Bank vice president and regional economist Gary Keith, left, talks with M&T regional sales manager James Condello before Keith presented his annual economic forecast Thursday at Locust Hill Country Club. Keith’s outlook for 2017 was very positive. He started the 25-minute talk before about 200 people by saying: “This year is different.” (Bennett Loudon)
“This year is different,” M&T Bank economist Gary Keith said Thursday at the start of his especially optimistic annual forecast for the Rochester area.
“I think most of us in the economic field are still trying to peer into our crystal balls and understand what the change in Washington is going to mean for the country — what it’s going to mean for us in Rochester,” Keith, an M&T vice president, told an audience of about 200 at Locust Hill Country Club.
His annual presentation on the outlook for the local economy was sponsored by the Rochester Home Builders’ Association Inc., the Greater Rochester Association of Realtors, the Genesee Region chapter of the Mortgage Bankers Association and the Rochester Women’s Council of Realtors.
Notwithstanding the uncertainty of how the election of Donald Trump will play out, Keith was bullish on the local outlook.
“I’m pretty optimistic for 2017 for the Rochester area,” Keith said during his 25-minute presentation.
“I think we’re getting to the point where we can say we are nearly out of the big hole that we’ve dug for ourselves over the last several years,” said Keith, who offered up an assortment of encouraging data.
“This is pretty amazing stuff, if you ask me, for Rochester,” Keith said.
Median household income in the Rochester area is now about $57,210, up from $53,597 in 2012, although it is still below the peak of $57,857 before the recession.
Gross domestic product for the Rochester area grew by 1.6 percent in 2016 and is forecast to grow 2.3 percent this year, he said.
GDP in the Rochester area peaked in 2006 at $57.8 billion. The measure dipped below $55 billion in 2008, but reached about $57.4 billion in 2016.
“We expect, if growth continues on the pace it’s on right now, 2017 will be the year that we surpass that previous peak, which I think will be a bellwether for the region,” Keith said.
In addition to an easing of the area’s “manufacturing woes,” low unemployment, and strong growth in payroll, housing sales are robust, with 14,278 closings in 2016, up from 13,273 in 2015.
The median sale price is up to $132,000, housing inventory is down to a low 3 ½ months, and new construction has returned to a pre-recession level, Keith said.
Plus, the “brain drain” seems to be slowing, based on demographic data showing that the number of 20- to 34-year-olds in the Rochester area has increased by almost 17,000 since 2010.
“Those folks have a lot to offer our community,” Keith said.
“It’s so exciting to see these trends happening in many of our upstate markets, bringing a vibrancy to our downtown cores, bringing that potential first-time homebuyer into the market as well,” he said.
In summary, Keith said the Rochester area should expect “modest growth by national standards” and “solid growth by our standards.”
“I’ve been doing this for too long to not sort of stand up and say, ‘Wow, this is really a positive momentum story.’ Unfortunately I can’t say it everywhere,” he said.
Rochester’s outlook is much more favorable than other upstate metropolitan areas, based on non-manufacturing GDP growth since 2007, which grew by 16.5 percent in Rochester. The Buffalo-Niagara region was up 14.9 percent; Albany was up 8.9 percent; and Syracuse was up only 3.4 percent.
The average increase since 2007 for all metro areas nationwide was 11.5 percent.
Keith, who delivers similar economic forecasts in other cities, said he told the audience in Syracuse: “Hold on, it’s going to be another buffeting year.”
“I’m going to be in Binghamton in two more weeks. I’m going to tell those folks, ‘You better keep your life preserver handy, unfortunately,’” he said.
“But standing here in Rochester I can say this is going to be, I think, in my opinion, a nice year for us ahead.”
