Department of Economics
  at Ithaca College

This is a difficult time to predict the economic future. Uncertainty abounds. Will financial markets continue to thaw? How much stimulus can we count on from the federal government? Can businesses retain employees, let alone make new hires?

The current recession began in December 2007 according to the National Bureau of Economic Research, the official arbiter in these matters. There is little doubt that it will be the longest recession in postwar history. The consensus among professional forecasters is that it will end in July 2009. That would make it 20 months long, beating the previous high of 16 months. Unemployment typically continues to rise for many months after a recession ends. Some analysts think the unemployment rate will top out at 10 percent or even higher.

There is a widespread notion that Tompkins County is immune to recessions due to the unique nature of the regional economy. The institutions of higher learning and the hospital can provide stability in stormy times. Nevertheless, we are not totally insulated from national economic conditions. Hard times across the country will put a strain on students’ ability to pay college tuition. Both Cornell University and Ithaca College are positioning themselves for leaner times. But certainly Tompkins County will fare better going forward than most counties across the nation.

Tompkins County has very few sub-prime mortgages and there will be less fallout from that, although foreclosures elsewhere will impact us. Additionally, employment in health and educational services is holding up so far. The only sector to add jobs in last December’s miserable national jobs report was health and educational services. This is our strong suit. Over half the jobs in Tompkins County are in these industries.

In the 1991 recession Tompkins County lost 1200 jobs and another 400 in 1992.  The 2002 recession merely resulted in a slowing of job growth. The County actually added 200 jobs that year. I am expecting the current downturn to impact Tompkins County more than the 2002 episode but less severely than the 1991 downturn.

My guess is that Tompkins County will lose 100 jobs in 2009 bringing total employment to 63,600. Retail sales will be very soft. I expect them to increase by less than 1 percent after increasing 2.2 percent in 2008. Look for home sales to hold steady. About 900 homes were sold in 2008 and I expect we could approach 1,000 homes sold in 2009. The unemployment rate will approach 4 percent for the year.

All of these variables, plus building permits, air traffic, and help wanted advertising are included in the Index of Economic Activity in Tompkins County. This index measures the standard of living in Tompkins County. The index decreased 0.2 percent in 2008 and I look for it to decline by a full percentage point in 2009.

Current Forecasts and Forecasting Record

Economic Activity in Tompkins County (annual growth rate)

                    Forecast     Actual

     1994 >      4.0%        2.4%

     1995 >      1.5%        0.9%

     1996 >      0.0%        1.3%

     1997 >      2.0%        1.0%

     1998 >      1.5%        2.5%

     1999 >      3.0%        6.0%

     2000 >      3.0%        1.9%

     2001 >      2.0%        1.3%

     2002 >      1.0%        0.5%

     2003  >      1.0%        0.8%

     2004 >       2.5%        2.4%

     2005 >       2.0%        1.4%

    2006 >        2.0%        1.0%

    2007 >        0.0%        0.8%

    2008 >        1.0%       -0.2%

    2009 >       -1.0%

Holiday Retail Sales in Tompkins County (in millions of $)

                    Forecast     Actual

     1994 >     $155         $156

     1995 >     $160         $159

     1996 >     $164         $159

     1997 >     $155         $165

     1998 >     $178         $168

     1999 >     $185         $186

     2000 >     $189         $186

     2001 >     $202         $195  

     2002 >     $220         $209

     2003 >      $225         $216

     2004 >      $250         $242

     2005 >      $273         $256

     2006 >     $279          $262

     2007 >     $275         $271

     2008 >     $284         $249

 

Home Sales in Tompkins County (number of units)

                   Forecast     Actual

     1994 >      670          610

     1995 >      670          658

     1996 >      620          741

     1997 >      690          785

     1998 >      750          884

     1999 >      850          967

     2000 >      980          936

      2001 >      900       1,019

      2002 >      960         948

      2003 >      925         939

      2004 >      930         997

      2005 >    1,000      1,040

      2006 >    1,000      1,041

      2007 >    1,000         912

      2008 >    1,000         854

      2009 >    1,000

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  The Index of Economic Activity in Tompkins County is a public service of Ithaca College.

Maintained by Elia Kacapyr (kacapyr@ithaca.edu)
Last updated 03/09/2009