New gross domestic product figures for 2015 provide important insights into the Rochester area’s slow recovery from the Great Recession—as well as significant potential for future growth.
Last year, the cumulative value of goods and services produced in the five-county metro area was $55.4 billion—good for 55th place among the 100 largest U.S. metropolitan areas ranked by population.
Adjusted for inflation, local GDP rose 1.6 percent—roughly half the 2.8 percent average gain for the top 100 metros. Rochester’s 2015 increase ranked 66th overall, slightly behind Albany (up 2 percent, 58th place) but ahead of Buffalo (up 0.9 percent, 86th place) and Syracuse (down 0.2 percent, 97th place).
The struggle to reengage economic growth following the Great Recession is evident in real GDP trends over the past six years (Figure 1).
While real Rochester area output is up 3 percent since 2008, it is still 2.5 percent below the 2006 peak. This compares to a 10.9 percent average gain for the 100 largest metros over the same period.
At face value, Rochester’s top-line GDP performance looks unfavorable versus many U.S. metros. However, looking more closely, a different picture emerges.
Since 2007, real output by local manufacturing firms has declined by 39 percent ($5.7 billion in constant 2015 dollars), led by downsizing at industrial icon, Eastman Kodak Co.
However, outside the industrial sector, real GDP has continued to expand—rising 15 percent since 2007, compared to a 10 percent average gain for the 100 largest metro areas where manufacturing data are available (Figure 2).
Rochester’s rebound is being led by above-average growth in professional and business services, information, real estate rental and leasing, health care and private education fields.
Further gains in these sectors should continue to transform Rochester’s economic DNA—helping the region become more competitive with other midsize U.S. metro areas in the years ahead.
Gary Keith is vice president and regional economist at M&T Bank Corp.
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