BY MARTY VANAGS
There is old joke about economists that says
you could lay all the economists in the world
down end-to-end and they would still never
reach a conclusion.
So it goes with economic forecasts; there
is ample material and information, but predicting
how the local economy will behave in
relation to regional, national and international
activities, all of which have a bearing on our
local economy, is daunting at best. Instead of
forecasting, let’s look at opportunities surrounding
the key industry sectors in Saratoga
County: advanced manufacturing, agriculture,
financial business process outsourcing,
research and development, and specialized
distribution.
“Great expectations” is the operative term
when it comes to the enormous investment
in advanced manufacturing–specifically the
semiconductor industry–in Saratoga County.
In 2015, worldwide spending on equipment
in semiconductor fabrication facilities or
“fabs” fell flat to 0.5 percent or about $35.8
billion. Fab equipment spending is predicted
to grow by 2.6 percent or $26.7 billion in 2016
according to the industry association SEMI’s
quarterly update. Leading industry market
groups predicted growth in the industry in the
upper single digits; they are now forecasting
1.3 percent growth.
What does this mean for GlobalFoundries,
our hometown fab? We are confident that their
$15 billion footprint and over 3,000 employees
will continue to have a positive impact on
our community. Success for our county will
hinge on our collective efforts to leverage this
investment.
The Saratoga Strategy, created by the
Saratoga County Prosperity Partnership,
provides a road map for making sure this said
investment sustains itself through increased
attraction activities, opportunities for new
business relationships, and education and
training. Relaxed requirements and standards
for development in Luther Forest Technology
Campus and the availability of land and buildings
will also increase our ability to generate
growth.
Agriculture continues to be a strong part of
the Saratoga County economy. Along with cash
crops and dairy, agriculture takes into account
the equine industry, farm-to-market growers,
and specialty food producers. Protecting our
rural areas and creating new agricultural opportunities
can be accomplished in tandem
with upticks in other sectors.
The U.S. Department of Agriculture recently
projected fiscal 2015 agricultural exports at
$141.5 billion, down $2.0 billion from the November
forecast and down $11.0 billion from
fiscal 2014. Part of this reason is the strength
of the dollar.
As the U.S. economy strengthens, the dollar
becomes stronger against other currencies
and the cost of products, including farm
products, becomes more expensive to the rest
of the world. The good news is the real dollar
appreciation reflects a strong and stable U.S.
economy. The recent interest rate increase
in the U.S. also makes our country attractive
for investment. These trends are expected to
continue.
If you have ever called you credit card
company or needed some customer service for
some type of insurance or business financial
transaction it is likely you have come in contact
with financial business processing. Medical
providers, insurance pension funds, computer
software, financial clearinghouse activities
are all experiencing growth. State Farm has
a major operation here in Saratoga County.
This type of presence paves the way for other
insurance and financial services companies.
The era of in-house research and development
units within major companies has
passed. Many companies now outsource this
operation. The requirements for locating these
types of companies vary in terms of physical
location; however, with the work of SUNY Poly
and the influx of GlobalFoundries engineers
and technicians, as well as their acquisition of
patents through the IBM transaction, there are
many opportunities for us to bring companies
with ties to these industries to our county.
It has been said that America’s warehouse is
located in the thousands of semi trucks that
ply our roadways everyday. They are filled with
goods and products and equipment that we
all want and need. The expansion of the Ace
Hardware warehouse from 800,000 square feet
to 1.2 million square feet and the proposed
Dollar General distribution center that could
be nearly 1 million square feet and add 420
employees, coupled with the existing Target
distribution center, confirms Saratoga County
as a prime location that can serve the consumer
just-in-time needs of our largest retailers.
Can we continue to grow in specialized
distribution? Does the county have the infrastructure
needed to attract more? This in
part hinges on the new Federal budget deal
and transportation funding coming out of
Washington, D.C.
While the Saratoga County economy looks
good, we cannot rest. Only in the movies does
the quote, “if you build it they will come” work.
In the real world of economic development,
one must constantly and consistently be vigilant
and proactive. We at the Partnership are
up to the task.