Binghamton & Regional Economy
Binghamton & Regional Economy
According to the NY State Department of Labor, the Southern Tier’s economy continues to slowly recover from the 2008 recession. From 2010 to 2011, the overall private sector job count in the Southern Tier (Broome, Chemung, Chenango, Delaware, Schuyler, Steuben, Tioga, and Tompkins counties) increased by nearly 1,200, or 0.6%, to just under 210,000.
Higher education has been a key factor to the region’s economic success. The region is home to several internationally-recognized universities, community colleges and training providers who offer instruction in a broad range of technical fields. Higher education (public/private) accounts for over 20,000 jobs, or about 1 of every 12 jobs in the region. Binghamton University will spend at least $184 million over the next five years on multiple construction and renovation projects in and around its Vestal campus. A $37 million Center of Excellence building is nearing completion; a $70 million Smart Energy Research and Development facility, currently in the planning stage; and a $21 million project to renovate two former dormitories into office and other space, which is expected to begin in early 2013. BU also plans to add classrooms, offices, food service facilities and laboratories. New tuition revenue will also allow the university to increase enrollment by 2,000 students and hire 150 new faculty members between 2012 and 2016. The initiative is expected to create more than 800 jobs.
Greek yogurt has been a huge boost to the Chenango County economy and the region's dairy farms. Chobani is the largest Greek yogurt manufacturer in the nation, launched in 2007 at an old Kraft Foods plant in New Berlin, NY. Today, Chobani has 17% of the US yogurt market, more than double the share of the next most popular brand, Yoplait Original, made by General Mills. Over the past five years, the company has invested $115 million in property and plant improvements, installing new machinery as part of an 80,000-square-foot addition to their existing plant. The expansion, including the acquisition of 100 acres of land adjacent to the current facility, has a total project cost of $88.5 million. The New Berlin plant, which employs more than 1,000 workers, bustles with 14 production lines that ship Greek yogurt around the world. In addition, Chobani was selected by the U.S. Small Business Administration (SBA) as one of its SBA 100 companies, which features 100 firms that created at least 100 jobs since receiving SBA assistance. The company also ranked high (#117) on Inc. magazine’s annual Inc. 5000 list, based on its rapid revenue growth. According to the magazine, Chobani’s revenues grew by 2,662% over a three-year period to $633.9 million! This was the strongest growth in the Southern Tier, and 5th strongest in New York State.
Public sector has been a weak link in the current recovery; between 2010 and 2011, government at all levels shed more than 1,700 jobs. Most job cuts have been at the local level (-1,300), as municipalities and school districts face increasingly tight budgets.
Manufacturing has played an important historical role in the economy of the Southern Tier, until recently accounting for a larger proportion of private sector jobs than nationwide. As of February 2013, according to the NYS Department of Labor, private sector employment in the Southern Tier totaled 81,900 jobs in the Binghamton MSA. Manufacturing accounted for 12,500 jobs downs from 17,900 in 2008. The most common occupations in the industry include assemblers, inspectors, testers, and engineers. Health and education accounted for 17,100 jobs up from 15,800 on the eve of the recession. Employment in government remained about the same, currently at 24,300 jobs. Hospitality and leisure remained relatively unchanged at 9,700; trade transportation and utilities declined from 21,100 to 19,400 jobs. The region’s transportation equipment manufacturing industry endured widespread employment losses from 2006-2009 due to the economic downturn. In fact, job losses continued into 2010 as a slowdown in rail-car production significantly impacted the western portion of the region. National recovery in the auto industry, defense-related work orders and recent rail-car contract contacts all point to future industry improvement in the region.
Marcellus Shale: a bright spot in the region’s economic prospects has been discovery of large deposits of natural gas in the Marcellus Shale, a Middle Devonian-age black, low density, carbonaceous shale that occurs beneath much of Ohio, West Virginia, Pennsylvania and New York. Marcellus has been more estimated to contain over 500 trillion cubic feet of natural gas. Using horizontal drilling and hydraulic fracturing extractive methods, possibly 10% of the gas (50 trillion cubic feet) might be recovered - enough to supply the entire United States for about two years with a wellhead value approaching one trillion dollars. The presence of an enormous volume of potentially recoverable gas in the eastern United States has a great economic significance considering its proximity to highly populated areas of New Jersey, New York and New England. The New York State Department of Environmental Conservation is currently studying if and when to authorize drilling in the State. Questions have been raised about possible environmental and community impacts. Most concerns are related to water use and management and the composition of the fluids used for fracturing the shale. Landowners have been approached by energy and land management companies about leasing their land.
A $280 million natural gas pipeline is being constructed in eastern Broome County. The Bluestone Pipeline, a 44-mile conduit will carry natural gas produced in northern Pennsylvania to the Millennium Pipeline, which will take it to energy markets on the east coast. The company was required to provide the Town of Sanford with a $1 million bond before starting construction to ensure any damage to town roads will be repaired. The pipeline is also expected to have a positive effect on Sanford’s assessed property values. The Laser pipeline, similar in length, added $29.8 million to the Town of Windsor’s tax base.
Recent trends: Growth in Manufacturing, University Housing, Arts
Emerson Network Power, local manufacturer Control Concepts was acquired and became part of Emerson; relocated from Water Street and constructed a 40,000 SF, $4MM world class manufacturing facility at the Charles Street Business Park. Emerson manufactures electrical surge protection devices for home, office, manufacturing and custom applications.
Raymond Corporation, a premier forklift manufacturer with origins in Greene, NY is moving manufacturing operations from Brantford, Ontario. The move will retain more than 740 existing jobs and add 100 new ones. The company expects to add several hundred more positions as the economy improves.
VMR Electronics is a rapidly expanding electronic cable and harnesses subcontract manufacturer for the defense industry and is a Tier 1 contractor to Lockheed Martin (Owego, NY). The company is relocating and consolidating its operations in a 160,000 SF building in downtown Binghamton. VMR is making a $4.5 million investment including new equipment and is expanding employment to 230 people.
Expanding downtown arts community/loft dwelling: older buildings in Binghamton’s central business district have become much sought properties for artists and a new generation of urbanites seeking the charms of late 19th century construction and the ambience of a small valley city. A leading proponent of the movement has been internationally reknowned Anthony Brunelli, a photorealist painter. Brunelli relocated from Soho to Binghamton where he purchased and converted a 4-story late 19th century commercial building into his home, gallery and studio. Anthony Brunelli is a world-renowned artist specializing in photorealism, an art style that recreates photographs with pinpoint precision. Brunelli’s work some of which is of his native Binghamton, has been displayed in New York galleries and from Morocco to South East Asia.
First Fridays/Arts Walk: Since February 2004, the City’s arts community hosts monthly First Fridays/Gallery Night. On the first Friday of each month, downtown art galleries are open offering wine, cheese and live entertainment. The monthly cultural celebration draws increasing numbers of arts patrons from 2-4 hours away.
Student housing projects: Binghamton University continues to expand student enrollment and various private developers have responded by renovating historic older buildings in the central business district to meet market demand for loft housing. 20 Hawley Street is a 9-story adaptive reuse of a 163,000 SF bank building into a 292-bed luxury student housing facility completed by Alfred Weissman Real Estate. Twin River Commons is a new construction 386-bed complex to comprehend an entire downtown block overlooking the Chenango River.
Demand for properties in the downtown State and National Register historic districts continues to rise – especially for mixed-use properties - converting 19th century buildings into lofts, art galleries and studios.
Additional factors driving city real estate interest are:
- Increasing awareness of the close proximity of Binghamton to New York City
- Investment interest in capitalizing on lower property and labor costs vs. southeastern New York
- Post 9/11 safety concerns about living and working in the greater New York area
- Realization that many businesses can be operated from comparatively relaxed upstate locations.
- Recognition of area’s strengths: attractive rivers, hill sides and natural surroundings, good schools, interesting historic architecture, low crime, good roads, short commutes, ethnic diversity, police and fire protection
New York is:
- The world’s 11th largest economy – headquarters for many world corporations
- 4th in the nation in worker productivity: according to Empire State Development, as measured by gross domestic product per worker. At $958 billion, New York’s Gross Domestic Product ranks third in the U.S. and the State’s per worker productivity surpasses the national average by 25 percent.
- First in the nation for number of degrees awarded in materials sciences, computer sciences and medical sciences; with 310 two- and four-year colleges and universities, New York is ranked second for number of degrees awarded in electrical engineering, mathematics, and biological sciences; and is ranked third for number of civil and mechanical engineering degrees awarded.
- An educated state: 30% of all adults have completed 4+ years of college compared to about 20% for the U.S. as a whole.
- Home to SEMATECH-North (Albany), a global consortium of 12 major computer chip manufacturers, which located its next generation computer chip research and development center at the Center of Excellence in Nanoelectronics at Albany. In attracting this important facility over other sites in the U.S., Europe, and Asia, New York advanced its image as a leader in chip research and development and raised its world status as a forerunner in the technologies of tomorrow.
- Home to Global Foundries, former division of Advanced Micro Devices (AMD) at Malta, NY. The $4.2 billion plant is one of the world’s most technologically advanced