Banking leaders see growth in Rochester manufacturing despite headwinds

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The Rochester region’s manufacturing sector is demonstrating both momentum and resilience, even as companies contend with cost pressures and market uncertainty, according to local banking leaders tracking activity across the industry. 

While challenges persist, manufacturers across the region are taking deliberate, strategic steps to sustain growth and reinforce Rochester’s industrial base, said Patrick Keating, Rochester regional president of Five Star Bank. 

“Local manufacturers are savvy, and they continue to find ways to do business,” Keating said, adding a combination of adaptability, strategic investment and regional expertise continues to position Rochester’s manufacturing sector for sustained growth, even in the face of evolving economic pressures.  

Volatility in natural gas prices and ongoing tariff uncertainty continue to complicate budgeting and project timelines, he noted. In response, many firms are proactively adapting by accelerating automation investments, diversifying supplier networks and leaning more heavily on relationship-based financing to maintain momentum. 

That adaptability is also influencing how projects are executed. Rather than halting investments, manufacturers are becoming more disciplined and strategic in their decision-making. 

Instead of pausing investments altogether, many manufacturers are recalibrating, Keating said. They are adjusting project scopes, phasing expenditures or leveraging flexible credit structures to keep initiatives moving forward even as costs fluctuate. 

This measured approach reflects a broader recognition that standing still is not an option in a competitive manufacturing environment. 

“You can’t just do nothing,” Keating said. “Manufacturers have to continue to invest and operate.” 

He added that demand remains strong for equipment financing, as companies continue to upgrade machinery and improve operational efficiency. At the same time, there is increasing interest in short-term working capital solutions designed to help offset price volatility and manage cash flow more effectively. 

Policy tools are also playing a role in supporting continued investment. Programs such as New York state’s Linked Deposit Program (LINC) are helping to reduce borrowing costs for qualifying manufacturers pursuing modernization or expansion projects, making it easier for firms to move forward with capital-intensive initiatives. 

Despite the uncertain backdrop, Keating remains optimistic about the region’s long-term outlook.  

He pointed to Rochester’s established strengths in advanced manufacturing, particularly in optics, as well as its skilled workforce with a strong work ethic and culture of innovation. 

“Traditionally, we have been a resilient community that is able to navigate difficult situations,” he said. 

Charles Vita, executive vice president and chief lending officer at Canandaigua National Bank, said a more diversified local manufacturing base, deep expertise in advanced manufacturing and strong educational institutions are helping the sector gain momentum and grow strategically.  

“There’s a lot of potential for real growth,” Vita said, noting that local manufacturers are moving forward with expansion projects and equipment purchases.  

He pointed to the latest ISM Manufacturing PMI report, which shows economic activity in the manufacturing sector is expanding nationally, mirroring what he is seeing across the Rochester-Finger Lakes region.  

While challenges persist—including pressures tied to tariffs and rising energy costs—Vita emphasized that manufacturers have proven both adaptable and resilient in navigating those headwinds.  

He added that the region’s long-standing strengths in optics, photonics and advanced manufacturing continue to serve as competitive advantages, particularly for industries such as defense, energy infrastructure, food production and packaging, medical equipment and machine tooling.  

Smaller regional firms are also well positioned to benefit from partnerships and supply chain opportunities connected to major projects, including fairlife’s large-scale production facility under construction in Webster and Micron Technology’s planned semiconductor megafab in Clay, Onondaga County.   

The Micron project, in particular, is expected to create ripple effects along the emerging semiconductor corridor stretching from Ohio to Albany, he noted. 

Additional opportunities exist through established regional players such as Wegmans Food Markets and L3Harris Technologies, both of which maintain significant operational footprints in the area.  

“Supply chain capabilities are strong in Rochester,” Vita said. 

Tim Brown, NBT Bank‘s Rochester regional president, said local manufacturers are taking a measured and strategic approach as they navigate an evolving economic landscape. 

In response to rising costs, companies are employing a range of tactics, including passing some of the additional expenses to customers, implementing surcharges and renegotiating existing contracts to preserve margins. 

At the same time, supply chain strategies are shifting. Brown noted that some manufacturers are moving away from reliance on a single supplier; and instead, are diversifying their vendor base to mitigate the risk of disruptions if a primary source falls short. 

Inventory management practices are also evolving. After years of emphasizing lean, “just-in-time” models to minimize costs, some firms are now adopting a more balanced “just-in-case” approach. This strategy allows manufacturers to maintain a buffer of critical supplies, helping ensure continuity in operations amid ongoing uncertainty, he noted. 

Despite these challenges, investment in modernization remains a priority. Brown said manufacturers are continuing to move forward with equipment purchases and facility upgrades designed to create more flexible, adaptable production environments. 

Additionally, initiatives led by organizations such as the Rochester Technology and Manufacturing Association and Monroe Community College continue to play a key role in building a skilled talent pipeline for the region, he added. 

Looking ahead, Brown expressed cautious optimism about the sector, citing the region’s strength in advanced manufacturing, ongoing workforce development efforts and overall resilience.  

“We shift and keep going,” he said. 

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