George E. Pataki, Governor February 2005

L

Linda Angello, Commissioner

numbers in thousands)

Change in Nonfarm JobsDec. 2003 - Dec. 2004

(Data not seasonally adjusted,

At a Glance

%IN DECEMBER... Net

Continued on page 3

Industry and Occupational Analysis (Part II)...

...NYS private sector jobs increased

2004

...NYS unemployment increased2003 2004

USA

NYS

...NYS unemployment rate increased

Seasonally adjusted

2003

Seasonally adjusted

2004

Percent

...NYS labor force participation down2003 2004

Employment-Population

Ratio

Total Nonfarm Jobs 59.0 0.7

Private Sector 63.9 0.9

Goods-Producing -9.3 -1.0

Nat. res. & mining 0.0 0.0

Construction 6.3 2.0

Manufacturing -15.6 -2.6

Durable gds. -4.9 -1.4

Nondurable gds. -10.7 -4.1

Service-providing 68.3 0.9

Trade, trans., & util. 2.8 0.2

Wholesale trade -3.1 -0.9

Retail trade 5.9 0.6

Trans., wrhs., & util. 0.0 0.0

Information -0.9 -0.3

Financial activities 5.9 0.8

Prof. & bus. svcs. 22.8 2.2

Educ. & health svcs. 26.1 1.7

Leisure & hospitality 12.4 1.9

Other services 4.1 1.2

Government -4.9 -0.3

Seasonally adjusted

In 000s

In 000s TotalUnemployment

Seasonally adjusted

2003

Number ofPrivate Sector Jobs

UnemploymentRates

Information Technologyin New York State

Percent

In December 2004, New York’s seasonallyadjusted unemployment rate was 5.3 per-cent, up from 4.9 percent in November. (Thenation’s unemployment rate was unchangedat 5.4 percent in December.) In December2004, the state had 8,476,700 nonfarmjobs, including 6,996,300 private sectorjobs, after seasonal adjustment. The numberof private sector jobs in the state increased by0.1 percent from November. (The nation’sprivate sector job count also increased by 0.1percent over the month.) From December2003 to December 2004, the number ofprivate sector jobs increased by 0.9 percentin the state and increased by 1.8 percent inthe nation (not seasonally adjusted). In addi-tion, New York’s employment-populationratio, a measure of labor force participation,went down slightly in December.

ast month, we discussed howthe IT sector is simultaneouslya set of industries and a mix ofoccupations. We also saw how

IT job titles fall into three broad skill levels,based on education and training require-ments. Overall, IT occupational employ-ment in New York State is expected toincrease by 7.1% between 2002 and 2012,according to projections prepared by theNew York State Department of Labor.This rate is somewhat lower than the 8.6%growth projected for all occupations inNew York State over this period.

Projected IT growth rates in the statevary widely by skill level. High-skill ITemployment, which is about 60% of state-wide IT jobs, is expected to grow at a rate

much faster – 18.3% – than overall ITpositions between 2002 and 2012.

In contrast, Moderate- and Low-skillITemployment, which collectively areabout 40% of IT jobs in New York, areexpected, like their counterparts at thenational level, to decline through 2012;Moderate by -7.4% and Low by -9.1%.Many occupations in the Moderate andLow categories are susceptible to beingreplaced by technology. The “DigitalEconomy 2003” report suggests, forexample, that recognition technologyand on-line telephone directories willreduce telephone operator employment.

As noted earlier, IT occupations occurthroughout the economy. However,

Focus on Western New YorkEMPLOYMENT IN NEW YORK STATE

Region Poised for Future Growthby John Slenker, Labor Market Analyst, Western New York

2

T

continued on page 3

New, Improved Methodology forEstimating Labor Force Statistics

I

he Western New York economycontinues to reposition itself forthe future, with job creation in-

creasingly driven by companies in service-providing industries. In 2004, service-providing industries (excluding government)accounted for 80 percent of all privatesector employment in the region. Asrecently as the mid-1970s, manufacturing’sshare of private sector jobs stood at al-most 40 percent. By 2004, this figure haddeclined to 16 percent. These figures arenot directly comparable, due to a changein industry classification that moved someformer manufacturing industries to non-manufacturing industries beginning with1990 data. However, they underscore thedramatic transformation of the region’semployment base.

The rise of employment in service-providing industries and the parallel de-cline of blue-collar jobs have importantimplications. During the national eco-nomic downturn in the early 1990s,about 10 percent of goods-producingjobs and 1 percent of private service-providing jobs in the region were shedbetween 1990 and 1992. In contrast,during the national recession and subse-quent “jobless recovery” spanning 2001-2003, the area only lost goods-producingjobs (about 10 percent), while actuallyregistering a small (1 percent) gain inservice-providing employment (exclud-ing government).

The financial activities sector added400 jobs over the past year. On theinsurance front, GEICO opened its newAmherst service center, which is ex-pected to eventually employ 2,500. In a$100 million deal, which is the largestprivate sector development in down-town Buffalo since 1967, BlueCrossBlueShield of Western New York is mov-ing its 1,200 workers to the formerBuffalo Gas Light Company site.

Retail trade employment is in for a bigboost with Bass Pro Shops expecting toopen a large establishment in the formerMemorial Auditorium in downtown Buf-falo. This new store, which will be ap-proximately 250,000 square feet, is beinghailed as a cornerstone attraction and is

expected to help revitalize the downtownarea and draw customers from both theU.S. and Canada.

A number of retail firms recently enteredor expanded in Western New York. Retail-ers currently increasing their presence inthe region include: discount grocers Save-A-Lot and Aldi Food Stores, which haveopened or plan to open a total of 8-10 areastores; Kohl’s department stores, whichplans three new stores for the region;closeout retailer Big Lots, which recentlyadded its tenth area store; and Lowe’sHome Improvement Warehouse, whichopened one store and plans two more.

The Seneca Allegany Casino thatopened in Salamanca (CattaraugusCounty) in 2004 created 1,100 jobs ac-cording to published reports. Total em-ployment at the two Seneca casinos inthe region is now almost 3,500. The newcasino attracts customers from nearbystates, as well as New York, and itsproximity to ski areas should expandopportunities for the future developmentof this resort area. The planned openingof a third Seneca casino in Erie County isstill being negotiated.

The total economic impact of thecasinos goes well beyond their directemployment. The opening and expan-sion of the casinos boosted constructionactivity. Work started last spring on a 26-

n an effort to improve the accu-racy of monthly Local Area Un-employment Statistics (LAUS)

estimates for state and local areas, the NewYork State Department of Labor has begunusing a statistically improved model, knownas the 3rd generation model, developed bythe U.S. Bureau of Labor Statistics (BLS).Estimates based on the new model, whichwill be adjusted each month using “real-time”data, will first be released with the publica-tion of January 2005 data in March.

Currently, monthly estimates of residentemployment and unemployment, and theresulting unemployment rate are preparedfor states, counties, metropolitan areas andplaces with population of 25,000 or more.

In New York State, labor force statistics arecalculated using a model that takes intoaccount: 1) data from the Current Popula-tion Survey (CPS), a monthly nationwidesurvey that interviews about 3,000 house-holds in the state; 2) data from a monthlynationwide survey of business establish-ments, (including 18,000 in New YorkState) that BLS uses for its monthly employ-ment report; and 3) unemployment insur-ance claims data. Model estimates are thenadjusted at the end of each year.

The existing model has overestimatedemployment and underestimated unem-ployment in states and metro areas, whichhas led to significant end-of-year revisions.It also has failed to capture the state-level

impact of “shocks” to the economy, suchas the September 2001 terrorist attacks.

In addition to using a new model to makeits estimates, BLS will adjust, or “bench-mark,” the estimates using a series ofinputs on a monthly basis rather thanwaiting until the end of the year. With thenew methodology, economic shocks willbe reflected in the state estimates on a real-time basis, and end-of-year revisions shouldbe significantly smaller. The new method-ology also addresses problems related toestimating unemployment created by thedifficulty of measuring new entrants to thelabor market and persons re-entering thelabor market after an absence at the sub-state level.

“The continued improvement in thenational economy is beginning tohave a positive impact in Western

New York.”

Samuel J. Drago,Regional Administrator

Western Region

EMPLOYMENT IN NEW YORK STATE

Information Technology... from page 1

Unemployment Rates in New York StateData Not Seasonally Adjusted

3

Employment in New York State

is published 12 times a year. For achange of address, write to the Publica-tions Unit at the address below andprovide your old as well as new address.

Division of Research and StatisticsNew York State Department of LaborBuilding 12, State CampusAlbany, N.Y. 12240

Western New York... from page 2

DEC’04

DEC’03

DEC’04

DEC’03

DEC’04

DEC’03

Director David J. TrzaskosEditor Kevin JackDirector of Communications Robert LillpoppGraphic Design Kim HardinEditorial Advisor Christine Perham

by Kevin Jack and Kevin Hannel

story hotel at the Seneca casino in NiagaraFalls. In addition, the wide range of com-panies that sell goods and services to thecasinos and their related hotels and res-taurants are enjoying increased sales.

Although Western New York lost 2,800manufacturing jobs over the year, thereare positive signs on the horizon. Forexample, manufacturers are still makingsignificant investments in the region.Among the most notable, the Ford Stamp-ing Plant in Hamburg is installing a new$62-million press that will speed upproduction. Time Release Sciences, amanufacturer of foam products, plans tohire an additional 200 workers over thenext two years. Dairy processor UpstateFarms Cooperative, Niagara Chocolatesand furniture maker Bush Industries areother examples of manufacturers thathave recently expanded or invested inthe region.

Looking ahead, many indicators sug-gest the region’s labor market is poisedfor a turnaround in 2005.The region’sover-the-year job losses totaled only 400in December 2004, considerably lessthan over-the-year losses earlier in theyear. In addition, the number of unem-ployment insurance beneficiaries has beenbelow year-ago levels every month sinceFebruary 2004, while the region’s unem-ployment rate has been below year-agolevels since July 2004. An improvingnational economy bodes well for theWestern New York economy.

New York State 6.2 5.2Capital District 4.0 3.8Albany 3.5 3.3Columbia 3.4 3.0Greene 5.1 5.0Rensselaer 4.4 3.9Saratoga 3.7 3.6Schenectady 3.8 3.9Warren 6.4 6.1Washington 4.7 5.1Central New York 6.1 5.7Cayuga 6.5 6.2Cortland 8.5 8.2Onondaga 5.1 4.8Oswego 9.0 8.3Finger Lakes 5.8 5.4Genesee 7.9 7.5Livingston 6.6 6.2Monroe 5.2 4.8Ontario 6.1 6.2Orleans 7.4 7.1Seneca 6.2 5.8Wayne 6.9 6.6Wyoming 7.5 6.8Yates 4.6 4.6

Hudson Valley 4.1 3.7Dutchess 3.7 3.6Orange 4.6 4.1Putnam 3.1 2.9Rockland 3.9 3.2Sullivan 6.3 5.7Ulster 4.6 4.4Westchester 3.9 3.5Mohawk Valley 6.4 5.4Fulton 6.1 5.7Herkimer 9.9 6.5Madison 6.8 6.1Montgomery 7.6 6.5Oneida 5.3 4.6Schoharie 5.9 5.5North Country 7.9 7.9Clinton 6.6 6.2Essex 6.5 6.9Franklin 7.7 7.4Hamilton 8.8 9.1Jefferson 9.0 8.6Lewis 9.2 9.8St. Lawrence 8.3 8.8

Southern Tier 5.8 5.1Broome 5.7 5.3Chemung 6.5 5.2Chenango 6.7 5.8Delaware 4.6 4.3Otsego 5.5 4.9Schuyler 8.8 7.3Steuben 8.1 6.8Tioga 5.9 5.5Tompkins 3.3 3.1Western New York 6.7 6.1Allegany 8.6 7.5Cattaraugus 7.8 7.1Chautauqua 6.7 5.7Erie 6.2 5.9Niagara 7.8 6.8Long Island 4.1 3.6Nassau 3.7 3.4Suffolk 4.4 3.9New York City 8.0 6.1Bronx 10.5 7.9Kings 8.7 6.7New York 7.7 5.7Queens 6.5 5.1Richmond 7.1 5.1

New York State IT Employment by Sector and Skill Level, 2003 (fourth quarter)

Sector59,40025,10028,00017,50017,10030,20034,800

212,100

Note: Data may not add to totals due to rounding; Source: Occupational Employment Statistics survey

Skill Level

High Moderate Low Total5,300

22,10020,10014,4003,2003,300

14,90083,200

7,7005,4003,0008,900

19,7006,500

13,60064,900

72,40052,60051,10040,80040,10040,00063,200

360,300

Prof. & Tech. ServicesInformationManufacturingTrade, Trans. & UtilitiesEduc. & Health ServicesFinancial ActivitiesAll Other Industries

Total

approximately one-half of all IT occupa-tional employment is found in just threesectors—professional and technical ser-vices (P&TS), information and manufac-turing (see table). Within the P&TS sector,by far the most IT employment is found inthe Computer Systems Design and RelatedServices industry, which has 39,700 ITjobs. Over 90% of this industry’s IT work-ers are in High-skill job titles.

Other individual industries with morethan 10,000 IT workers include: WiredTelecommunications Carriers (18,700),Management of Companies and Enter-prises (14,300), and Professional andCommercial Equipment and SuppliesWholesalers (10,400).

There are four industries in which IToccupations comprise at least 50% of alljobs. Besides the aforementioned Com-puter Systems Design and Related Ser-vices (66.1%), IT jobs represent a majority

of all employment in Software Publish-ers (57.1%), ISPs and Web Search Por-ta ls (51.5%), and Computer andPeripheral Equipment Manufacturing(50.2%).

State of New YorkDepartment of Labor

Division of Research and StatisticsW. Averell Harriman Office Building

CampusAlbany, New York 12240

OFFICIAL BUSINESS

FIRST-CLASS MAILPOSTAGE & FEES PAIDEmployment Security

Permit No. G-12

EMPLOYMENT IN NEW YORK STATE

REGIONAL ANALYSTS’ CORNERhttp://64.106.160.140:8080/lmi/index.html

RS-2

FINGER LAKESWILLIAM RAMAGE

585-258-8870Private sector employ-ment in the Rochesterarea declined 4,100, or0.9 percent, over theyear to 445,400 in De-cember 2004. Jobgains in educational andhealth services (+700),professional and busi-ness services (+500)and financial activities(+400) were outpacedby losses in manufac-turing (-3,300) and lei-sure and hospitality(-1,200).

NORTH COUNTRYALAN BEIDECK 518-891-6680

Private sector employment in the North Country region increased overthe year by 1,300, or 1.1 percent, to 114,700 in December 2004. Thelargest gains were in trade, transportation and utilities (+1,300), educa-tional and health services (+400), and professional and business services(+400). Losses were centered in manufacturing (-600).

SOUTHERN TIERJOSEPH KOZLOWSKI 607-741-4485

Private sector employment in the region rose by 400, or 0.2percent, to 255,300 over the 12-month period ending De-cember 2004. Job gains in educational and health services(+600) along with smaller gains in several other industriesoutpaced losses in trade, transportation and utilities (-300),financial activities (-200), and construction (-200).

MOHAWK VALLEYMARK BARBANO315-793-2282

Private sector employment in theUtica-Rome metro area rose900, or 0.9 percent, to 101,000for the 12-month period endingDecember 2004. Gains in edu-cational and health services(+300), manufacturing (+300),and leisure and hospitality (+200)offset declines in professional andbusiness services (-200). Gov-ernment employment (+600)grew mostly at the local leveldue to expansion at theTurning Stone Casino.

WESTERN NYJOHN SLENKER716-851-2742

Private sector employment inthe Buffalo-Niagara Falls areafell by 2,700, or 0.6 percent, to453,600 over the 12 monthsending December 2004. Em-ployment gains registered ineducational and health services(+400), financial activities(+200) and professional andbusiness services (+200) weremore than offset by losses inmanufacturing (-1,800), trade,transportation and utilities (-500),and leisure and hospitality (-500).

CAPITAL DISTRICTJAMES ROSS

518-462-7600From December 2003 to December 2004, thenumber of private sector jobs in the Albany-Schenectady-Troy area increased by 5,400, or1.5 percent, to 358,400, a record high for themonth. Job gainers were led by educational andhealth services (+1,500), professional and busi-ness services (+1,000), natural resources, miningand construction (+800), financial activities (+600),information (+600) and other services (+500).

HUDSON VALLEYSEAN MacDONALD

914-997-8798Private sector employment increased12,800, or 1.7 percent, to 767,000 overthe 12 months ending December 2004.Jobs were added in trade, transportationand utilities (+4,100), professional and busi-ness services (+2,100), leisure and hospital-ity (+1,900), educational and health services(+1,600), natural resources, mining andconstruction (+1,400), financial activities(+1,300), and other services (+1,300).Manufacturing (-700) lost jobs over the year.

CENTRAL NYROGER EVANS315-479-3388

Private sector employ-ment in the Syracuse arearose 3,400, or 1.2 per-cent, over the year end-ing in December 2004.Professional and businessservices, leisure and hos-pitality, and educationaland health services addedthe most jobs over theyear. Job growth is ex-pected to continue withLockheed Martin, AXAFinancial and SutherlandGlobal Services planningto add a combined total of925 jobs this year.

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NEW YORK CITYJAMES BROWN 212-621-9353

New York City finished 2004 on a positive note, with private sectoremployment rising over the year by 1.3 percent and the unemploymentrate dropping from 8.0 percent in December 2003 to 6.1 percent inDecember 2004. Tourism and professional and business services playedkey roles in the City’s improved economic performance.

LONG ISLANDGARY HUTH 516-934-8533

Private sector employment increased overthe year by 11,500 to 1,057,500 in De-cember 2004. Job gains were led byeducational and health services (+4,100),professional and business services (+3,100),leisure and hospitality (+2,500), trade, trans-portation and utilities (+1,200), and finan-cial activities (+600). Employment fell overthe year in information (-700).