Upstate manufacturers' jobs have declined in recent years, which is the result of productivity gains and the contracting out of services, both of which have been going on for decades, both upstate and nationwide, he added. But to measure the importance of manufacturing, economists and policymakers must consider not only manufacturers' jobs themselves, but also jobs created by their suppliers, distributors, and other companies that depend directly on manufacturers, as well as the spending of employees of all of these companies in the local consumer economy, Kagann said. Considered this way, manufacturing still accounts for about half of the upstate economy, including about two-thirds of the economy of Rochester and about 53 percent of the economy in Buffalo, he added. Kagann flatly rejected arguments by some public figures that reductions in direct manufacturing jobs mean that manufacturing industries are part of New York's economic past. Its ups and downs will lift or drag an economy more than any other sector.
Manufacturing still matters.
The downstate, mostly commercial economy began turning around in 1996, and the upstate economy began recovering in 1997, he said. That the upstate recovered more slowly should be no surprise, he added. That's to be expected of a manufacturing economy, largely because capital investment that increases during recovery will produce benefits faster in a commercial economy than in a manufacturing one. A manufacturing base is harder to rebuild. Most upstate regions are now growing at or above national rates and above rates registered by the other American industrial states of the Northeast and Midwest, he said.