The Rochester region’s uneven economic recovery

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When COVID-19 struck Rochester in early 2020, the regional economy suffered a staggering blow, but the impact varied among industry sectors. Some stumbled; others collapsed.

A similar story can be told about the local rebound over the last two years. While the economy overall is much stronger than at its low point during the pandemic, the recovery has been uneven.

new statistical dashboard launched two weeks ago by the state Labor Department offers a range of comparative data on employment by industry sector statewide and in more than a dozen metropolitan regions. The data span the period from January 1990 to February this year.

The numbers show how hard the first wave of the pandemic hit the regional economy, and document how with each monthly job gain the area has edged closer to where it was prior to the pandemic, though it has not closed the gap entirely.

In February 2020, just before COVID was declared a global pandemic, the Rochester region had 452,600 private-sector jobs and total nonfarm employment of 533,400. Two months later, at the height of the pandemic lockdown, those numbers had fallen to 369,000 private-sector jobs and 444,400 nonfarm jobs—declines of 18.5 percent and 16.7 percent, respectively.

The leisure and hospitality industry suffered the most damage, shedding nearly 56 percent of its employees regionwide. Not far behind was the accommodation and food services sector, with a 48 percent drop in employment. Together, they recorded a loss of 41,600 jobs. Others that dropped by more than one-fifth were construction (22.4 percent) and retail trade (21.3 percent).

By contrast, the government and financial activities sectors saw only single-digit percentage declines—6.7 percent among local, state and federal government employees, and 7.2 percent in financial activities. 

Narrowing the gap

The latest data, from February, show that private-sector employment has climbed back to 435,600, regaining 80 percent of the jobs reported in February 2020. Another 17,000 jobs would bring the total even with two years ago. The recovery in nonfarm employment has reached 76 percent of the February 2020 level, a gap of 21,400 jobs.

The strongest rebound has been logged by two sectors that endured some of the steepest percentage job losses in spring 2020: construction and retail trade. The construction industry regionwide last month had 700 more jobs than it did in February 2020, up 3.6 percent, while retail trade was up 1,000 jobs, or 2 percent.

The two sectors bringing up the rear in terms of recovery are educational services, which has 8.9 percent fewer jobs than in February 2020, and accommodation and food services, with 8.4 percent fewer jobs.

The regional economy’s largest employment sector—health care and social assistance—last month had 82,400 jobs, versus 86,700 in February 2020, a decline of 4,300 or 5 percent. Manufacturing, much diminished from the glory days of Kodak and Xerox but still an important sector, last month had 54,800 jobs, down 1,500 or 2.7 percent compared with just before the pandemic hit.

Post-pandemic challenges

Regaining all of the employment ground lost when COVID arrived would be a notable achievement for the local economy, but it must be kept in perspective. As a new report from the Research & Statistics Group of the New York Federal Reserve Bank underscores, the Rochester region in recent decades has seen little growth in both employment and population. The transition from a traditional manufacturing economy to one now led by educational institutions and health care remains a work in progress.

As of 2019, the Rochester metro had a five-year job growth change of 3.2 percent. That outpaced Buffalo and Syracuse—both at 2.8 percent—but trailed both the state (7.4 percent) and the nation (8.6 percent) by a considerable margin. The 10-year change in population, also as of 2019, was -0.8 percent for Rochester, -0.7 percent for Buffalo and -1.9 percent for Syracuse. All three—and 0.8 percent for New York as a whole—were far behind the nation’s 7 percent growth.

Rochester had a slight edge over its neighbors in 2019 median household income—$60,700, versus $58,800 in Buffalo and $60,000 in Syracuse—but again they trailed New York ($71,600) and the U.S. ($65,000). 

In all likelihood, COVID’s economic disruptions are mostly behind us. The odds are good, however, that Rochester will continue to face other economic challenges in the post-pandemic era.

Paul Ericson is Rochester Beacon executive editor. Data visualizations by Jacob Schermerhorn.

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