Category Archives: Economic Outlook 2023

By Darryl Leggieri

As we say farewell to 2022, we can reflect on what a great year it was for leisure travel and in the meetings industry.

Leisure travel was anchored by many of our major attractions and cultural institutions, such as the Saratoga Performing Arts Center, Live Nation, Saratoga Casino Hotel, Universal Preservation Hall, Caffe Lena, National Museum of Racing, and the historic Saratoga Race Course. The track’s summer meet eclipsed one million in paid attendance for the seventh consecutive year.

As for meetings and events, the return of business was swift. Not even rising costs, staffing shortages and a possible recession changed meeting planner confidence. While we are still below pre-pandemic booking levels, we saw that our leads and bookings volume were on the rise.

When we look at the numbers for our lodging partners, there was much to celebrate. Through November of 2022 year to year, Saratoga County saw steady growth over 2021. Over the previous 12 months, demand increased by 14.8 percent, occupancy was up 12.9 percent, average daily rate was up 11 percent, and revenue per available room was up 25.3 percent. Since group business is not entirely back, leisure business literally saved the day.

The occupancy and average daily rate that our lodging partners were able to command shows a strong return to business, and breaking records for revenue in many cases.

By Todd Shimkus

Every month, the Saratoga County Chamber of Commerce shares with its members what we call the “Insiders Report.” This email includes charts and analysis of economic trends as we analyze labor data, sales tax collections, the revenue per available room for area hotels, and residential real estate, all with a hyper focus on Saratoga County.

Our biggest takeaway from these reports in 2022 is that the only thing that has held back our local economy is the historic labor shortage we continue to face. According to the state Labor Department for instance, the unemployment rate in November 2022 for Saratoga County was 2.1 percent with just 2,600 people considered unemployed. Throughout 2022, the number of individuals unemployed in Saratoga County has consistently been lower than ever before. 

Similarly, the number of people employed in November of 2022 is 120,900, which is also the highest number of people employed in this month ever. Even with some limited workforce reductions now taking place, there are still so many local jobs unfilled that it would appear the labor shortage will continue into 2023.

The second biggest takeaway is that residents and businesses continue to spend money in our local economy, in spite of high inflation.  From January through November 2022, Saratoga County collected a record $144.6 million in sales taxes, up 5.3 percent from the same time period in 2021, and up 23.5 percent from 2019. 

By Tom Roohan 

The year 2022 was clearly a strong year for real estate in Saratoga County and surrounding areas. 

We experienced near record average price for homes as well as record turnaround time from day-of-listing to sold. The average sales price was 100.1 percent above asking pricing for 2022. 

Headwinds heading to 2023 are primarily driven by the Federal Reserve’s decision to stage interest rate increases to stop inflation. These rates have doubled the cost of borrowing for homeowners in the past four months. The cost of borrowing has had a dramatic impact on real estate sales and additional rate increases are anticipated in early 2023. 

Current fixed rates at 6.25 percent has had a more dramatic effect on first-time home buyers and slowed construction from buyers trading up to new construction. This trend is anticipated through the first six month of 2023, which will continue to moderate our industry. 

It is my hope that inflation will diminish as we head toward summer and the Federal Reserve will slightly reduce interest rates. This should stimulate the economy and hold off a deep recession as experienced in 2008. 

By Tori Riley

Creating Saratoga County’s economic development future has been our mission for over 44 years of existence. Working with SEDC to create and maintain our economic vitality are many partners—Saratoga County and local governments, regional businesses large and small (across industry sectors), our Industrial development agencies (IDAs), CEG, universities, colleges, career/tech educators and our K-12 school districts—to name a few. 

SEDC has been fortunate to have such solid partnerships that have made propelling business and responsibly growing our county’s vibrant and diverse economy. One of those partnerships has been with Dennis Brobston. He let us know a few months ago that he is looking to finally slow down a little. 

We will miss Dennis immensely. As leader of our organization for the last 15 years and part of the SEDC team for over 25 years his dedication, expertise, wealth of knowledge, humor, relationships with peers and members and his endless recollection of projects and their history has been an instrumental asset in our success. True to his character, he has laid the foundation for our organization to continue successfully without interruption.

SEDC, with our partners and our stakeholders, continues to evaluate, qualify and launch projects. In 2022, our efforts delivered another $45.6 million in new investment that retained 35 jobs, created 217 new positions and added just over $13 million in new payroll. This is in addition to the previous two years, when we have supported $232 million of investment,  creating over 629 jobs with over $38 million in new payroll while retaining 730 existing jobs.

By Rene A. Walrath

Despite the concerning job cuts, recent reports suggest that workers will continue to have the upper hand in the labor market. Recruiters and hiring managers will need to become more proactive, or aggressive, in their search for top-tier talent. Job seekers have their sights set on the total package, the most prominent being enjoyment and fulfillment in their role, in addition to a hearty salary and benefits package.

The year 2022 brought about many workforce trends, the most considerable being the availability of remote work. While offering remote work may continue to be an option with some companies, especially within IT and technology, it is not as commonplace as it was two years ago. 

More and more companies are heading back to the office. There has been a gradual shift from working at home to being in person, many companies are or have been requiring their employees to spend a significant amount of time in the office.

While making this transition to in-office requirements, companies are now more cognizant of employees’ circumstances, and some will continue to offer a hybrid schedule. These employers willing to offer individuals a more robust work-life balance and make accommodations for working parents will lure more highly qualified and desirable employees. Measuring and understanding employee well-being is becoming a vital way to attract and retain top talent.

By Sara Mannix

Many business leaders are predicting a recession to come our way soon, and the majority of those we have spoken with are at least preparing for an economic slowdown in 2023. 

You wouldn’t think this would inspire positive vibes, right? 

Not necessarily. If there is one thing that I have learned about economic downturns, it is that when they happen, those who invest in marketing are usually the ones that come out of the recession the strongest.

This is true for both of Mannix Marketing’s focuses: digital marketing and tourism marketing.

The digital marketing industry has been growing since the 1990s, and that should continue into 2023. As always, businesses will need to invest advertising and marketing dollars where their customers are – and now more than ever that’s online and on apps.

From SEO to PPC to social media marketing, industry leaders know that during economic dips they need to focus on their core business and their people. They will partner with marketing experts to handle the digital marketing. Failure to successfully market during these times can be devastating to companies for several reasons, including a) losing customers and market share during the recession and b) not being ready when the economy starts buzzing again.

By Janet Besheer

It was an interesting year in real estate in the Capital Region. There were several shifts in our market. Interest rates went up, home prices started to come down, and inventory remained tight. 

On the bright side, homes are now staying active on the market longer. Rather than selling in a matter of days, properties are on the market for many weeks and in some areas for months. 

There are fewer bidding wars. Buyers can take a breath when making offers on properties. Price reductions are starting to be a daily occurrence, something we did not see in early 2022.

Real estate is regional and varies across the country. Markets that saw a radical increase in prices over the past few years (such as Arizona, California, and Idaho) are currently experiencing the greatest decrease in prices as we move into 2023. However, the Capital Region has been fairly insulated from the extreme highs and lows. Prices will be somewhat steady this year, growing at a rate of approximately 3 percent according to Realtor.com. 

The average home sale price in the Capital Region in late 2022 was $279,000.

By Doug Ford

What a wild and crazy year 2022 turned out to be. I for one went into 2022 optimistic after coming off the COVID experience and thought we were headed back to a more stable business climate. 

I could not have been more wrong and I’m sure many others would say the same. Being part of the construction industry for more than 46 years I can attest it was the most challenging year of my career for many reasons, labor being the biggest factor. Unfortunately, many of those same challenges will carry over into 2023.

 According to the National Association of Homebuilders (NAHB), the housing industry will likely see a double digit decrease in 2023. Locally it may not be as bad, but down from the past few years. Multifamily construction remains strong both nationally and locally and that trend will likely continue into 2023. Remodelers remain active with a backlog of work to complete partially due to the country’s aging housing stock.

As we start the new year the big question is what’s lies ahead? There are many opinions, and the signals are mixed much like the previous year. Inflation continues to be a major concern fueled by ongoing supply chain snarls brought on by pandemic stresses as well as the Russia/Ukraine war. 

BY PETE BARDUNIAS

In the 12 years I’ve been involved in community leadership here in Saratoga County, one oft-overlooked consideration is the issue of mobility. The future generation may be at risk of being, in a practical sense, less mobile than their predecessors, and that will have significant impact on economics.

Have you ever driven along a major thoroughfare and come across someone on a bicycle, riding with you in the traffic? Watching that person pedal along, mere inches in some cases from the cars passing at 40-50 miles per hour, can be pretty scary. 

Darlene McGraw from Halfmoon, a local advocate for mobility issues for those unable to use conventional transportation, was struck on her special tricycle last year as she traveled on Route 146 in Clifton Park. In an age where we hear so much about using alternative means of transportation to get to work or play, it still seems rather dangerous to actually do it. Bicycle trails, especially in Clifton Park, are excellent, but sometimes one must go onto the main roadway. The roads themselves are busy places these days, not particularly safe for bicycles or even for cars. Impatient drivers often pass on the double yellow lines, a practice that gets even more dangerous on rural roads when a farm tractor is being passed.  Many serious accidents have happened due to this behavior and other bad habits.

In talking to people about the problems, the consensus seems to be that roads need upgrades, better alternative means of transportation need to be developed, or both.  During the past couple of years, some had hoped that the rise of remote work would alleviate such issues, but the reality seems to be that the flexible schedules involved today only shuffle things around a bit, moving traffic to different roadways or other times of the day, while also increasing the demand for services which aren’t quite there yet.  

By Gina Mintzer

Last year was quite a year to live, work and play in the Lake George region as we emerged from the pandemic, yet still reeling from various side effects.  

Looking ahead for 2023 we are planning for much of the pre-pandemic typical cyclical business highs and lows that the tourism industry realizes due to seasonal travel patterns and annual events, yet still on guard for staffing and supply chain challenges and managing what we can for the best outcomes for our businesses, employees, and the community at large.  

As we know, the tourism sector is crucial to our Lake George regional economy. The health of this industry affects all who live in the area, whether directly working in hospitality or not. Tourism dollars spent in the area help to offset the local tax burden by thousands of dollars each year. A robust tourism sector also means more attractions, dining, shopping and more to offer to residents as well.

 The collaborative efforts that began among many cross-sections of our business community have continued to make our region stronger, nimble and safer. As customer service will continue to be a strong focus of business, we will see more focus on in-house training as each guest, for lodging, dining and retail are more important than ever to keep our business sustainable.