CenterState CEO President Rob Simpson's 2024 Economic Forecast Remarks
Posted on January 31, 2024
CenterState CEO President Rob Simpson delivered the following remarks at the 2024 Economic Forecast Breakfast event on Jan. 31, 2024:
Let me begin with a special thank you to St. Joseph’s Health and M&T Bank. We are deeply appreciative of your support of this event and of our agenda to catalyze this moment of economic growth and shared prosperity for Central New York.
I would also like to recognize one of our most important partners, Hope Knight, the Commissioner for Empire State Development. Recently, the Central New York Regional Economic Development Council released CNY Ascent, an update to its 2015 plan, CNY Rising, which outlines our region’s strategic vision for growth. You can learn more by checking out the latest episode of CenterState CEO’s podcast, Talk CNY, presented by NBT Bank.
I also want to take this moment to acknowledge my family and the incredible staff at CenterState CEO. You rock. I draw so much inspiration from your energy, passion, and dedication to the work we do.
What you just heard from Luke Tilley represents a critical assessment of our national and regional economy. The positive momentum that Luke outlined provides important and relevant context to help us better understand the forces that are influencing our community’s trajectory. As the nation outperforms others and disinflation continues, the conditions for our own economic progress will accelerate.
Evaluation of data and rooting decisions in facts is foundational to how our organization approaches its work, and why we continue to engage you, our members, in producing the Economic Forecast Report each year. The information you provide helps us and your peers with a perspective and context necessary to plan and execute against the challenges and opportunities we all face.
What’s remarkable about this year’s Economic Forecast Report is that it underscores an undeniable belief that growth is happening.
- Nearly 65% say the strength of their business in 2024 is strong or very strong.
- 49% expect to increase capital investments this year.
- More than half, 55%, expect an increase in jobs and hiring in 2024.
- 56% expect to expand products and services this year.
- 72% expect sales or revenues to increase in 2024.
The exclamation point on this growth is overwhelming optimism and widespread confidence unlike anything we have ever seen.
- 85% believe that in five years, the CNY economy will be better than it is today.
- 89% shared they have a positive outlook for the economic health of the CNY region in 2024.
In all the years that I have stood here and presented our annual outlook, never have forecasters been this bullish about the future of our regional economy. This data reflects a positive shift of our collective mindset. It is a level of confidence and enthusiasm that acknowledges that things are different now. We don’t just hope that growth is coming - we expect it. We believe it and most importantly, we deserve it.
We are now at a crucial juncture. Because while we all agree that growth is inevitable, it’s more imperative than ever that we wrap our collective consciousness around the scale of what’s ahead and the speed at which it is coming. It has never been more important for us to come together with a shared sense of purpose and lean into strategies that will enable us to grow at this new, rapid pace of change.
Last week, I had the opportunity to join partners from the Brookings Institution and Intel to get a firsthand look at the construction happening at Intel’s new facility in Ohio. There, the shell isn’t out of the ground yet and already there has been 1.6 million labor hours in the project. 70% of the jobs created at the fabs will be accessible with a 1-year credential. As a reminder, Intel's Ohio project will be two fabs, with an investment of $20 billion and 3,000 jobs expected to be created. Compare that to Micron’s Clay facility, with its four fabs, $100 billion investment and 9,000 jobs.
Seeing Intel’s project take shape and working with our partners at Micron, solidifies for me the remarkable speed that advanced manufacturing is happening in the U.S. thanks to the bipartisan CHIPS and Science Act, championed by Senator Schumer, among others.
We see this trend in our economic development pipeline too. Currently there is more than $8.3 billion in potential projects in our pipeline. Last May, we reported that the same pipeline was the largest we have ever seen at $6 billion at that time. The most significant growth in jobs and investments comes in the advanced manufacturing sector. And this data doesn’t reflect the supply chain jobs associated with Micron’s investment, which we anticipate will start to hit our pipeline in the second half of this year.
This anticipated growth rightfully should fuel our newfound confidence in our advancing economic position. However, given the speed at which we are growing, expectations and hope are not enough to shape the future we want and deserve. We need a plan, rooted in data, and we all need to dig into the gritty work of ensuring success.
Over the past several months, CenterState CEO’s board of directors has begun to think about what this organization must do to utilize this momentum to ensure our entire community benefits from this growth.
One of the areas we have been focused on is housing. We have not built enough housing in the last 12 months. Frankly, we haven't built enough housing in the last 20 years. We need a significant amount of new housing to meet the current and future demand. We need to be building around 2,500 units of housing every year but we're only building about 350 units right now. Housing was also a concern noted by our forecasters in this year's survey, particularly for the most vulnerable in our community.
Which is why it is imperative that the housing we create must be both affordable and diverse to ensure these vulnerable populations aren’t further impacted by a lack of basic needs. As our forecasters rightly pointed out, housing is a critical component of our ability to meet our region’s increasing demand for talent.
The good news is there are real things we can all do to meet this challenge head on. A few weeks ago, Mayor Walsh talked about his Housing Promise during his State of the City address and committed to creating thousands of new units in the city. But this isn’t a problem the city alone can tackle. Thankfully, Onondaga County Executive Ryan McMahon is also laser focused on creative housing solutions and investments across the county. And CenterState CEO will soon release a housing memo that highlights one critical opportunity for enabling this growth.
Through our analysis, we found that in Onondaga County, multifamily housing is allowed as of right on just 1% of urbanized residential land outside of the city. 1%. We cannot meet this moment with single-family housing alone, we must embrace a higher density of development or face unprecedented sprawl. But it is not just large-scale multi-family projects that we need to embrace, “missing middle” housing – or housing that is middle density and/or middle income - is permitted on just 26% of urbanized residential land.
What this means is that in many of our neighborhoods, building the type of housing we need to support new residents, young families and seniors looking for a smaller space is outright prohibited or requires extensive permitting. Housing that is in demand but missing in our middle market simply cannot be adequately provided due to current zoning conditions. Changing outdated zooming regulations must be a priority throughout the region if we are to meet the moment.
Like housing, strained health care systems will also affect our ability to support an influx of new residents. This was also at the top of the pressures cited by our forecasters. Significant interventions are needed to build a health care system that addresses the challenges of health care workers shortages at every level. This shortage was exacerbated by COVID-19, which sparked a mass exodus of workers through early retirement and career changes. We also need to grow the network of primary care physicians and specialists to treat our community members.
Based on current service levels for Onondaga County, for a population increase of 100,000 we would need:
- 100 more primary care physicians
- 100 more dentists
- 300 more individuals providing mental health care
- This is in addition to the thousands of postings we see every year for RNs and LPNs
- Onondaga emergency department visit rate is 3,800 per 10,000 population, and the hospitalization rate is 1,110 per 10,000.
- If our population increased by 100,000, we would see an additional 38,000 emergency room visits and 10,000 hospitalizations annually.
We also need to expand our facilities, which are aging and outdated. Specifically, we need more long-term care and mental health facility beds to meet demand and prevent the utilization of acute care beds when there are pinch points in the system.
There are solutions our community can support. We can build on current partnership models like the one between Oswego Health and Upstate where institutions communicate needs for emergency care and hospital beds. For its part, CenterState CEO can convene a process for collaboration among providers and identify a set of priority investments necessary to increase capacity in the system. We can also work with providers and our elected leaders to make the regulatory changes required to promote technology adoption to ease the strain our health care system is struggling with.
We can also revisit our successful Health Train initiative and other front line training models while embedding health care career opportunities in our broader talent strategies.
Talent strategies. Talent is an issue we face across all sectors of our economy.
Attracting, retaining, and training talent is, according to our forecasters, the biggest economic factor impacting their business. Frankly, talent has been the leading pressure on our business community for the past several years, and with the influx of additional job opportunities that lies ahead, we must think and act big now, if we are to meet the needs of that impending growth.
Right now, there are more than 4,000 open jobs (many at middle and higher skills levels) on This is CNY. At the same time, we have 10,500 individuals currently unemployed, which represents a roughly 3.5% unemployment rate. As I mentioned earlier, Micron is expected to create 9,000 direct jobs and 40,000 additional jobs over the next decade.
Fortunately, we have a talent pool of 25,190 students graduating with degrees from CNY colleges and universities, each year. This includes a growing international student pool among those graduates, yet the visa and H-1B process is not well understood and many employers lack the resources and knowledge to hire those international students. This is something we intend to support moving forward to maximize the benefit of the work done by our world-class educational institutions to recruit and train talent right here in Central New York.
Last year, an analysis of the census bureau’s 2021 American Community Survey, ranked Syracuse No. 7 in U.S. cities where most Gen Zers are moving to post-pandemic. The changing dynamics of population movement are on our side, which puts CNY in a stronger position to attract talent.
So, what is the solution? How do we leverage these trends? For starters, partners must be convened to align and integrate all existing talent attraction programming and initiatives under one coordinated approach. Nascent interventions around student engagement and soft-landing services can help us tap into the pipeline of talent that exists on our local college and university campuses.
You can play a critical role too. How many of you have open opportunities connected to This is CNY? How many of you actively promote the region to the young talent you know? How many of you mentor these young graduates?
While important, talent attraction and retention alone are not enough to change the economic conditions of our community at large. Uncovering talent and streamlining the process to train and connect them to the career opportunities across our economy is what makes the Governor’s announcement of One Network for Advanced Manufacturing Partnerships or ON-RAMP so exciting. ON-RAMP's flagship location in Syracuse will be a clear, go-to workforce resource for the entire community, and has the potential to transform our workforce development efforts.
We are excited for the opportunity to lead the planning and design of the ON-RAMP hub in Syracuse. The time to invest in our advanced manufacturing workforce is now. CenterState CEO, with a multitude of regional partners, is currently addressing this through workforce development programming such as Surge Defense, Electrical Mechanical Technician and Surge Advanced Manufacturing. But these programs and others like it need to scale up to ensure New York keeps pace with expected industry growth, and that we do so equitably.
What is truly remarkable about this initiative and moment is that it is another opportunity for cities across the Thruway to work together. This initiative, along with the recent federal Tech Hubs designation and other cross-thruway collaborations, expands success past a singular region and establishes upstate New York as a super region growing the advanced manufacturing industry in New York, together. How fortunate that for a region that was beset for decades by an inability to work together, we now see an alignment of leadership collaboration that coincides with a once-in-a-generation market opportunity like the wave of reshoring reshaping our economic landscape. The time is now to capitalize.
The belief in the potential for this level of technology and innovation to drive our economy is recognized by our forecasters as well. 79% of them say the CNY economy is transforming into a technology focused hub of innovation, advanced manufacturing and entrepreneurism. And in another sign of the confidence, I mentioned earlier, 68% have much better or somewhat better confidence than last year at this time that the public and private investments are in fact coming to fruition in Central New York.
Over the past decade we have made the investments needed to shift those trends and reposition ourselves as a hub of innovation and new company formation.
In economic terms it’s a trend noted as the “Startup Surge.” In Central New York, the trend of increasing business applications has been underway since 2014 and continued even stronger since the pandemic. From 2020 to 2021, business applications in Central New York increased from 4,491 to 6,095, placing the region in line with the record increase seen throughout the nation. In 2022, new business formation cooled somewhat, as business applications declined slightly across New York State. In Central New York, however, the positive growth trend for new business applications continued its run, with 6,193 applications for new businesses.
Not only are we seeing a growth of startups in the region, but those companies are increasingly made up of diverse workers. For most of the early 2000s, diverse workers in the region made up between 9 to 11% of the workforce at young companies. In 2022, diverse workers in the Syracuse MSA accounted for 20%. There has never been a higher overall level or percentage of diverse individuals working at young companies in the Syracuse MSA and 57% of the growth in employment at young companies since 2014 have come from diverse individuals.
Yet, according to a recent Brookings Metro Report, Black and Latino or Hispanic groups represent about 33% of America’s population, but only 9% of the nation’s business owners with employees.
Yes, we need to continue to raise and invest the capital that is critical to driving innovation. And we need more founder-based programming to support innovation and drive workforce development as a whole. But we need to also be intentional in supporting BIPOC founders through programs like our Syracuse Surge Accelerator and our Growth and Equity Fund to increase the diversity of our tech ecosystem.
We also need to do better at engaging larger firms, as they too have a significant role to play in our region’s entrepreneurial ecosystem as intrapreneurship is a vital part of driving innovation. If you run an existing company that sees the value in meeting with innovators, exploring new technology, acquiring businesses to drive growth, or accessing the creativity of our startup community, we need you to put your hand up now and join us as we prepare to reopen the Tech Garden in early 2025 with new partnerships, programs and value for our region’s entrepreneurs.
We can’t do this work alone. From its very inception, the private business community, including M&T Bank, National Grid and Northland Communications have been committed and critical partners in this work. Together we have fostered a sense of innovation and pride in our entrepreneurial community. Now, we need that support to be on a scale that better matches the growth of The Tech Garden and our region’s position as a technology hub.
There is always something about traveling that puts home in an important perspective. Visiting Columbus last week, I was energized by what I saw happening in a community that is on a parallel journey welcoming the semi-conductor industry to its economic landscape. But returning home to Syracuse Hancock International Airport was also a good reminder of the scale of the challenge before us.
The current air service landscape is characterized by growing demand and growing service, with an expectation for it to continue this trend. Air service at Hancock is up by 26% since 2003, and enplanements are the highest they have ever been. Records set in 2019 for passengers are now being broken. With this level of growth, it’s not surprising that Hancock is the fourth busiest airport in the state.
Growth at the airport includes the expansion of NUAIR. Last year, the Federal Aviation Administration increased the amount of air space for its remote, autonomous beyond visual line of sight operations to 240 miles. This waiver further positions NUAIR to expand and lead advanced air mobility development.
For decades, positioning our airport for growth was a top-organizational priority. Today it is a jewel and is the fastest-growing airport in the Northeast. But to keep pace, the airport needs roughly $500 million in improvements for gates, a new parking deck, expanded cargo facilities and new systems, most of which passengers need but never see, like baggage or de-icing. Gone are the days where $10M and $20M investments will meet the moment – this is a new moment where our investment needs to meet the scale of our ambition.
And it’s not just our airport that needs investment. Currently, 60,000 to 70,000 residents in Buffalo-Rochester-Syracuse live in one MSA but work in another. Yet current funding levels for passenger rail service are insufficient to provide high-speed rail connections between Upstate’s metro areas, or to and from places like New York City. If we want these economic engines across upstate work together to seize this moment, we need to better connect them now and into the future.
It would be easy to get overwhelmed by the totality of these needs and investments. This growth is what we always hoped for. Now, it’s here, it’s real, and it’s bigger and coming at us faster than anything we have managed before.
For decades, this community, led by our business, academic, philanthropic, and elected leaders have come together to push the proverbial rock uphill. And now we find ourselves running headfirst down the other side of the hill, chasing the rock. Unquestionably, this is more fun work. The pace of reward and payoff has already changed dramatically. We are seeing success upon success in rapid succession. But don’t be lulled into complacency. This work is harder. Expectations have changed. The stakes are higher. Teamwork is more important than ever. If you’re a CenterState CEO member, now more than ever we need you engaged. If you aren’t yet a member, reach out, because this moment requires us all.
You may be familiar with the African proverb, "If you want to go fast, go alone. If you want to go far, go together." Well, this moment that we are currently in requires us to go far and fast.
So, get your game face on. Stretch. Hydrate. Do whatever you need to do to get yourself ready. And then point yourself down that hill and sprint. The starting gun went off a while ago. And whatever happens, just remember, we are one team. If someone trips, pick them up. If someone gets tired, put them on your back. After all, we are one community, and we are at our best when we stick together.
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