ECONOMIC REPORT
of the
HUDSON VALLEY
Fourth Quarter 2010
MARIST COLLEGE
Dr. Christy Huebner Caridi
Bureau of Economic Research
School of Management
Poughkeepsie, New York 12601
Edited by Leslie Bates
March 2010
This report is available on the Bureau of Economic Research homepage at
http://www.marist.edu/management/bureau
The support of research assistant Haley Hart
is acknowledged and appreciated.
While every effort has been made to ensure that the information in this report is accurate, Marist College
cannot be held responsible for any remaining errors.
Hudson Valley Labor Force
Twenty-one months into the national recovery labor market participation,
employment and job creation remain weak. Compared to the near-term peak employment
reached in the 3rd quarter of 2008, labor force participation has fallen by 52,000 persons
and employment has declined by 72,700. Significant improvement in the labor market in
general and the level of joblessness in particular may be many years off. In the most current
year, the region experienced job growth in only four of the eleven super-sectors
represented in the region. Health and education created the largest number of jobs at 4,200
followed by professional and business services and leisure and hospitality at 2,400 each.
Trade, transportation and utilities created 300 jobs.
As of the 4th quarter 2010, the health and education sector was the largest
employer in the region (20.85 percent of non-farm employment). The increasing
importance of this super-sector is an important regional development. Both industries
within the super-sector are large relative to the regional labor force and population and as
a direct consequence draw income into the region. The primary beneficiary of this inflow
of income is the local business community. The primary disadvantage is the super-sector’s
strong reliance on government funding and thereby the possibility that employers in this
sector will find it necessary to downsize operations due to lack of funding and/or reduced
reimbursements.
A national trend with regional consequences is the increase in the level of
temporary hires. Temporary jobs by their very nature are not long-lived and tend to be
part-time. This type of employment serves an important role for business but does little to
eradicate the problem of unemployment and underemployment. People are underemployed
if they accept part-time employment when they wanted full-time employment and/or
accept a job below their skill level. The impact on a community can be profound. The
longer a person is underemployed, the stronger the possibility that they will remain
underemployed. The consequence is lower lifetime earnings. Of equal importance is the
displacement of the semi-skilled and unskilled job applicant by the over-qualified. The
growth in the number of underemployed is one of the more pernicious legacies of the Great
Recession.
Year-over-year, employment continued to fall in manufacturing (1,000), financial
activities (1,100), information (500) and the public sector (3,400). All told, private-sector
job creation is just keeping pace with private-sector job destruction (year-over-year,
private -sector employment grew .71 percent). Total non-farm employment (public and
private) grew.09 %.
Unemployment has had a minimal impact on the average weekly wage (AWW).
On average, the AWW advanced between the 3rd quarter of 2009 and the 3rd quarter of
2010 (most recent data). Across the region, public-sector wages advanced more than
private-sector wages. Within the region, the strongest advance in public-sector wages
occurred in Westchester County at 10.24 percent, followed by Dutchess (9.43 percent)
and Putnam (7.39 percent); in contrast the smallest year-over-year advance occurred in
Sullivan (3.71 percent) and Orange (3.76 percent). The AWW paid in the traditionally
high-wage, goods-producing sector (manufacturing, construction and mining) was a
mixed picture. The wage increased in Rockland (6.90 percent), Orange (2.98 percent),
Ulster (2.72 percent) and Sullivan (.45 percent) and decreased in Putnam (-8.12 percent),
Dutchess (-2.05 percent), Greene (-1.70 percent) and Columbia (-.61 percent). Regionwide, wages in the service-providing industries continued to rebuild, albeit advancements
in private-sector wages continue to lag behind their public-sector counterparts. As is
consistent with the geographic proximity and strong economic cross-flows with New
York City, the average non-farm sector wage paid in the southernmost counties of
Rockland and Westchester are the highest within the Hudson Valley region. Dutchess
County (with its strong manufacturing base) pays the highest regional AWW in the
goods-producing sector. Across the region and on average, for every one dollar paid in the
goods-producing industries, $.60 is paid in the service-providing industries. An important
exception is Westchester County. Westchester’s service sector is heavily weighted in
top-tier service-sector jobs and as a direct consequence the wage premium paid in the
goods-providing sector is approximately one half ($.30) of the regional wage premium.
The family budget continues to be negatively impacted by the rising price of
necessities, unemployment, underemployment and the reduced earning of fixed-income
recipients. Taken together, more and more families are becoming dependent on food
stamps, temporary assistance and home-heating assistance. As of the 4th quarter of 2010,
208,700 residents of the Hudson Valley were receiving monthly food-stamp benefits: one
out of every 11.5 persons. The number of Hudson Valley residents who received monthly
Temporary Assistance (TA) – which includes Family Assistance (FA) and Safety Net
Assistance (SNA) – increased from 34,450 persons in the 3rd quarter of 2010 to 34,940
persons in the 4th quarter of 2010.Year-over-year, the number of monthly TA recipients
advanced 6.33 percent. Over the same one-year period, the monthly expenditure for TA
fell $.2 million, from $14.20 million per month in the 4th quarter of 2009 to $14.00 million
per month in the 4th quarter of 2010. During the 4th quarter of 2010, the average monthly
per-person SNA and FA benefits were $446.31 and $358.96, respectively. Safety Net
Assistance is the more costly of the two programs at 52.00 percent of total TA
expenditures; FA serves the largest number of persons.
Housing values remain well below peak valuations and year-over-year, losses
continue to dominate, albeit at a slower and more orderly pace. Across the region the
median selling price fell in Greene (7.47 percent) Columbia (2.33 percent), Orange (1.1
percent), Putnam (5.61 percent), Rockland (2.59 percent), Sullivan (4.06 percent) and
Ulster (1.28 percent). The median selling price advanced in Dutchess (2.82 percent) and
Westchester (3.17 percent). In both cases a small number of high-end sales created an
upward bias. Region-wide, the sales of existing single-family homes fell 23.42 percent
from 3,547 in the 4th quarter of 2009 to 2,716 in the 4th quarter of 2010. Over the same 12month period, existing home sales fell 23.06 percent in New York State and 19.24 percent
nationwide. Foreclosure (for the full year 2010 there were 7,849 home foreclosures in the
Hudson Valley) and homeowners with zero equity (the mortgage balance is greater than
the current market value of the house) continue to negatively impact both the national
and the regional housing markets. A secondary downturn is a strong possibility. Several
factors are at play. The duration of joblessness in concert with the slow rate of job
creation has seriously impacted the ability of many homeowners to meet monthly
mortgage payments. Secondly, the downturn in housing values has impacted the
willingness-to-pay. Job growth should mitigate some if not all of the potential distressed
sales or foreclosures stemming from an inability to pay. The unwillingness-to-pay is far
more problematic. If the home is owned by an investor, foreclosure will be the norm
rather than the exception. If the home is owner-occupied, ties to the community could
trump the economic burden of negative equity and limited mobility.
Uncertainty in the housing market continues to place downward pressure on the
demand for new housing. In the 4th quarter of 2010, 256 single-family construction
permits were issued in the Hudson Valley, down from 287 in the 3rd quarter. The total
construction cost is estimated at $74.34 million or $290,390 per permit. Within the
region, Orange County issued the most single-family construction permits (89) followed
by Westchester (44) and Dutchess (30). In the 4th quarter, 16 multiple-family
construction permits were issued compared to 21 in the 3rd quarter. As of the 4th quarter,
the largest construction project in the region is a $15.36 million, 30-building/376-unit
complex in Newburgh. Permits for this project were issued in the 1st quarter of 2010.
Hudson Valley Labor Force
Region experiences a year-over-year increase in employment
and labor force participation. Unemployment rate falls.
Year-over-year labor force participation in the Hudson Valley fell 21,300 and
employment advanced 27,500. Because employment increased at a quicker pace than the
reduction in the
regional labor force,
the unemployment
rate fell .06 percent
from 7.56 percent in
the 4th quarter of
2009 to 7.50 percent
in the 4th quarter of
2010. Compared to
the near-term
employment peak
reached in the 3rd
quarter of 2008,
labor force
participation has
fallen by 52,000
persons and employment has declined by 72,700. As has been the case since the onset of
the Great Recession (December of 2007), residents in the Putnam-Rockland-Westchester
metropolitan statistical area (MSA) (lower Hudson Valley) experienced a lower rate of
joblessness in the 4th quarter of 2010 when compared to residents in the upper Hudson
Valley.
Non-Farm Employment by Place of Work 1
Growth in the health and education services sector continues to dominate job
creation. Financial activities and manufacturing continue to contract.
Since the trough in the business cycle
reached in June of 2009 (December of 2009 in New
York State), private-sector job creation in the
Hudson Valley has advanced .31 percent compared
to a .35 percent decline in the number of privatesector jobs created in the overall economy. Job
creation has been concentrated in two of the
The increasing significance of the
health care and private education
industries is an important
regional development.
1
Current Employment Statistics (CES): survey of sample employers excludes self-employed, agricultural, domestic workers,
and the military. Place of Work Series.
1
region’s eleven super-sectors (the health and education services sector and the trade
transportation and utilities sector). Since the end of the Great Recession, employment in
these two sectors advanced 11,100 and 3,000, respectively. In both cases, the post-recession
job growth exceeded the national average for that sector and job creation was the
strongest during the six-month period immediately following the trough of the business
cycle. Year-over-year, the sectors continue to grow albeit at a much slower pace.
The region is becoming increasingly dependent on these two super-sectors. As of
the 4 quarter 2010, the health and education services sector was the largest employer in
the region (20.85 percent of non-farm employment) followed by the trade, transportation
and utilities sector (19.62 percent of non-farm employment). The growth in the health care
and private education industries is of particular importance. Both industries are large
relative to the regional labor force and population and as a direct consequence draw
income into the region. The primary beneficiary of this inflow is the local business
community. The downside of the increased dependence on this super-sector is the sector’s
strong reliance on government funding.
The only other super-sector that has experienced post-recession job growth is the
business and professional services sector at 2,400 jobs year-over-year and 1,800 postrecession. On the national level, job creation in the business and professional services
sector has been entirely in temporary service workers. Total employment in the leisure and
hospitality sector remains negative relative to the business cycle trough at minus 3,200
jobs. Year-over-year, the sector created 2,400 jobs. Similar job creation occurred in the
overall economy. Employment continues to fall in the manufacturing, financial activities
and information sectors.
th
2
Third-Quarter 2010 Average Weekly Wages 2
On average, in 3rd quarter 2010,
Average Weekly Wages (AWW) in
the non-farm sector advanced relative
to the 3rd quarter of 2009. The single
exception was Sullivan County which
experienced a year-over-year decline of
-1.41 percent: the primary cause was a
3.45 percent reduction in the AWW
paid in the service-providing sector.
Overall the largest year-over-year
advance occurred in the public sector.
Within the region, the strongest
advance in public-sector wages
occurred in Westchester County at
10.24 percent followed by Dutchess
(9.43 percent) and Putnam (7.39
percent); in contrast the smallest yearover-year advance occurred in Sullivan
(3.71 percent) and Orange (3.76
percent). The AWW paid in the
traditionally high-wage, goods-
Private-sector wages lag
behind the public sector
Average Weekly Wages
Nonfarm
GoodsProducing
ServiceProviding
Government
$739
$602
$637
Columbia
2008.Q3
$629
2009.Q3
$650
$815
$615
$675
2010.Q3
$673
$810
$633
$723
$863
$1,443
$693
$937
Dutchess
2008.Q3
2009.Q3
$889
$1,559
$720
$954
2010.Q3
$906
$1,527
$736
$1,044
2008.Q3
$649
$892
$493
$867
2009.Q3
$654
$940
$490
$877
2010.Q3
$695
$924
$550
$922
2008.Q3
$713
$834
$644
$908
2009.Q3
$732
$838
$658
$957
2010.Q3
$755
$863
$679
$993
Greene
Orange
Putnam
2008.Q3
$811
$998
$727
$996
2009.Q3
$841
$1,146
$752
$947
2010.Q3
$847
$1,053
$771
$1,017
$906
$1,280
$806
$965
Rockland
2008.Q3
2009.Q3
$889
$1,276
$793
$949
2010.Q3
$929
$1,364
$828
$997
Sullivan
producing sector (manufacturing,
2008.Q3
$608
$669
$544
$782
construction and mining) was a mixed
2009.Q3
$637
$668
$580
$808
picture. The wage increased in
2010.Q3
$628
$671
$560
$838
Rockland (6.90 percent), Orange (2.98
Ulster
percent), Ulster (2.72 percent) and
2008.Q3
$662
$822
$571
$859
Sullivan (.45 percent) and decreased in 2009.Q3
$662
$808
$576
$861
Putnam (-8.12 percent), Dutchess (2010.Q3
$681
$830
$580
$920
2.05 percent), Greene (-1.70 percent)
Westchester
and Columbia (-.61 percent). Region2008.Q3
$1,099
$1,368
$1,052
$1,142
wide, wages in the service-providing
2009.Q3
$1,064
$1,357
$1,021
$1,094
industries continued to rebuild, albeit
2010.Q3
$1,110
$1,367
$1,061
$1,206
advancements in private-sector wages
continue to lag behind their public-sector counterparts. As is consistent with the
geographic proximity and strong economic cross-flows with New York City, the average
non-farm sector wage paid in the southernmost counties of Rockland and Westchester
are the highest within the Hudson Valley region. Dutchess County (with its strong
2
Average weekly wage data was secured through a special request to the New York State Department of Labor.
3
manufacturing base) pays the highest regional AWW in the goods-producing sector.
Across the region and on average, for every one dollar paid in the goods-producing
industries, $.60 is paid in the service-providing industries. An important exception is
Westchester County. Westchester’s service sector is heavily weighted in top-tier servicesector jobs and as a direct consequence the wage premium paid in the goods-providing
sector ( typically high-wage industries) is approximately one half ($.30) of the regional
wage premium.
Monthly Income Maintenance Benefits (Social Assistance)
As of the 4th quarter of 2010, approximately one out of every 11.5 persons in
the Hudson Valley was receiving food-stamp benefits. The rate of increase
continues to decline.
The family budget continues to be negatively impacted by the rising price of
necessities, long-term unemployment among the unskilled and semi-skilled, the
substitution of full-time employment by part-time employment, uncertainty in the
housing market and the reduced earning of fixed-income recipients. Taken together, more
and more families are becoming
dependent on food stamps,
temporary assistance and homeheating assistance. As of the 4th
quarter of 2010, 208,700
residents of the Hudson Valley
were receiving monthly foodstamp benefits compared to
202,000 persons in the 3rd
quarter of 2010. Year-over-year,
the number of monthly foodstamp recipients has increased
17.25 percent. Importantly, while the number of recipients has continuously increased, the
rate of increase has declined in each of the last three quarters. This may be attributed to a
leveling off in the rate of job loss and the early stages of stability in the housing sector.
Statewide, 2.94 million persons received food-stamp benefits during the 4th quarter of
2010; 61 percent of all food-stamp recipients were residents of NYC.
The number of Hudson Valley residents who received monthly Temporary
Assistance (TA) – which includes Family Assistance (FA) 3 and Safety Net Assistance
(SNA) 4 – increased from 34,450 persons in the 3rd quarter of 2010 to 34,940 persons in the
4th quarter of 2010.Year-over-year, the number of monthly TA recipients advanced 6.33
percent. Over the same one-year period, the monthly expenditure for TA fell $.2 million,
from $14.20 million per month in the 4th quarter of 2009 to $14.00 million per month in
the 4th quarter of 2010. During the 4th quarter of 2010, the average monthly per-person
SNA and FA benefits were $446.31 and $358.96, respectively. Safety Net Assistance is the
3
As of December 1996, Family Assistance is limited to 60 months per lifetime. To be eligible for Family Assistance, the
household must include (care for) a minor child.
4
Safety Net Assistance has a lifetime limit of two years.
4
more costly of the two programs at 52.00 percent of total TA expenditures; FA serves the
largest number of persons.
Home Sales, Prices and Building Permits
Home prices show improvement. Sales volume remains weak.
Housing values remain well below peak valuations, and year-over-year losses
continue to dominate, albeit at a slower and more orderly pace. Across the region the
median selling price fell in Greene (7.47%), Columbia (2.33 percent), Orange (1.1 percent),
Putnam (5.61 percent), Rockland (2.59 percent), Sullivan (4.06 percent) and Ulster (1.28
percent). The median selling price advanced in Dutchess (2.82 percent) and Westchester
County
Peak
Peak
4th Qt
%
(3.17 percent). In both cases a small
Date
Median
Median
Change
number of high-end sales created an
Price
Price
upward bias. Region-wide, the sales
Columbia
2007.Q1 $256,750 $210,000
-18.21%
of existing single-family homes fell
23.42 percent from 3,547 in the 4th
Dutchess
2006.Q3 $360,000 $277,500
-22.92%
quarter of 2009 to 2,716 in the 4th
quarter of 2010. Over the same 12Greene
2008.Q3 $179,950 $161,000
-10.53%
month period, existing home sales fell
Orange
2007.Q3 $330,000 $252,700
-23.42%
23.06 percent in New York State and
19.24 percent nationwide. Foreclosure
Putnam
2006.Q2 $435,777 $311,500
-28.52%
and homeowners with zero equity
(mortgage is greater than the current
Rockland
2005.Q3 $529,950 $404,250
-23.72%
market value of the house) continue
Sullivan
2007.Q2 $187,500 $120,000
-36.00%
to negatively impact both the national
and the regional housing markets. A
Ulster
2007.Q3 $265,000 $212,875
-19.67%
secondary downturn is a strong
possibility. Several factors are at play.
Westchester
2007.Q3 $730,000 $577,750
-20.86%
The duration of joblessness in concert
with the slow rate of job creation has seriously impacted the ability of many homeowners
to meet monthly mortgage payments. Secondly, the downturn in housing values has
impacted the willingness-to-pay. Job growth
should mitigate some if not all of the
potential distressed sales or foreclosures
stemming from an inability-to-pay. The
For the full year 2010, total foreclosure
unwillingness-to-pay is far more
activity in the Hudson Valley numbered
problematic. If the home is owned by an
7,849. In the 4th quarter, lenders filed
investor, foreclosure will be the norm rather
1,165 pre-foreclosure notices, 299 homes
were auctioned and bank-owned
than the exception. If the home is ownerproperties (REO) increased by 222.
occupied, ties to the community could trump
the economic burden of negative equity and
limited mobility.
Uncertainty in the housing market continues to place downward pressure on the
demand for new housing. In the 4th quarter of 2010, 256 single-family construction
permits were issued in the Hudson Valley, down from 287 in the 3rd quarter. The total
construction cost is estimated at $74.34 million or $290,390 per permit. Within the
5
region, Orange County issued the most single-family construction permits (89) followed
by Westchester (44) and Dutchess (30). In the 4th quarter, 16 multiple-family
construction permits were issued compared to 21 in the 3rd quarter. As of the 4th quarter,
the largest construction project in the region is a $15.36 million, 30-building/376-unit
complex in Newburgh. Permits for this project were issued in the 1st quarter of 2010.
Multi-Family Construction Permits January - December 2010 Source: U.S. Census Bureau
County
Orange
Town/Village
Number of
Buildings
Number of
Units
Value of
Construction Permit
Average
Construction Cost
per Unit
Kiryas Joel Village
6
28
$2,803,843
$100,137
Montgomery Town
1
2
$338,722
$169,361
Montgomery Village
8
40
$2,041,664
$51,042
New Windsor Town
3
29
$3,207,725
$110,611
32
1
51
388
15
502
$16,766,846
$2,250,000
$27,408,800
$43,214
$150,000
$54,599
Carmel Town
1
3
$818,169
$272,723
Patterson Town
1
5
$304,167
$60,833
Philipstown Town
1
2
$400,000
$200,000
3
10
$1,522,336
$152,234
7
86
$5,720,000
$66,512
Kaser Village
2
19
$2,150,417
$113,180
New Hempstead
Village
New Square Village
2
4
$760,000
$190,000
3
9
$1,585,000
$176,111
Newburgh Town
Wallkill Town
Putnam
Rockland
Clarkstown Town
Ramapo Town
1
2
$1,100,000
$550,000
Spring Valley Village
3
73
$9,271,280
$127,004
Stony Point Town
1
2
$225,000
$112,500
19
195
$20,811,697
$106,727
13
26
$1,062,110
$40,850
13
26
$1,062,110
$40,850
$106,691
Sullivan
Fallsburg Town
Ulster
Kingston Town
1
4
$426,764
Lloyd Town
2
43
$2,200,000
$51,163
Olive Town
1
2
$351,894
$175,947
Wawarsing Town
3
49
$640,000
$13,061
7
98
$3,618,658
$36,925
Bedford Town
Greenburgh Town
Mount Vernon
1
2
1
4
8
2
$718,200
$1,480,000
$143,574
$179,550
$185,000
$71,787
Port Chester
1
2
$200,000
$100,000
Sleepy Hollow Village
1
2
$131,000
$65,500
Somers Town
2
73
$9,000,000
$123,288
$100,000
Westchester
White Plains
2
4
$400,000
Yonkers
6
83
$12,800,157
$154,219
16
178
$24,872,931
$139,735.57
6
Sales Tax Collection
An important indicator of retail sales activity and state and county revenue is sales
tax collection. Year-over-year, total sales tax collection advanced 7.71 percent from $288.1
million in the 4th quarter of 2009 to $310.4 million in the 4th quarter of 2010. The largest
year-over-year increase occurred in Columbia County (13.20 percent) followed by Ulster
(8.60 percent) and Rockland (8.40 percent).
Quarterly Sales Tax Collection
2010.Q4
2009.Q4
2008.Q4
2007.Q4
2006.Q4
Columbia
$7,818,920
$6,907,393
$6,879,994
$7,808,605
$7,778,384
Dutchess
$38,461,604
$35,823,532
$37,116,802
$38,967,669
$37,663,175
Greene
$6,222,068
$5,856,614
$6,199,443
$6,836,112
$6,482,988
Orange
$57,657,798
$53,678,119
$53,364,174
$58,670,749
$56,537,450
Putnam
$12,491,265
$11,704,923
$11,981,110
$12,654,272
$10,569,009
Rockland
$43,370,842
$40,009,770
$40,678,402
$44,625,000
$40,770,145
$7,659,613
$7,288,228
$8,226,786
$9,007,987
$7,810,861
Ulster
$24,437,806
$22,502,568
$23,594,487
$25,537,784
$24,719,947
Westchester
$112,253,226
$104,366,233
$108,470,561
$118,255,477
$111,390,044
Hudson Valley
$310,373,142
$288,137,380
$296,511,759
$322,363,655
$303,722,003
Sullivan
7