Offering a crystal ball on the north country’s economy in 2012, three business experts weighed in on such topics as how a stronger dollar will affect Canadian tourism, why the dairy industry is staged to thrive and what some strategies are for taking advantage of the healthy Fort Drum populace at an “Economic Forecast” panel discussion Tuesday at the Best Western Carriage House Inn, part of a series hosted by the Greater Watertown-North Country Chamber of Commerce.
Speakers were Robert M. Simpson, president and CEO of the CenterState Corporation for Economic Opportunity, Syracuse; Gregory A. Gardner, assistant professor of business at SUNY Potsdam, and Jay M. Matteson, executive director of the Jefferson County Agricultural Development Corp.
Arguably one of the most notable trends affecting the north country this year will be a stronger dollar, Mr. Gardner said, caused by the European debt crisis and a drop in value of the euro. In consequence, European investors are expected to flee from the euro to the dollar, he said.
This may seem like a positive trend, but a stronger dollar actually will harm the amount of Canadian business done in the U.S., he said, and particularly in the north country. A more robust dollar means higher prices for Canadians visiting the north country, and businesses in the retail and tourism industries could see a drop in sales.
“The difference will be seen in the number of Canadian shoppers and tourists here in 2012,” he said, adding that low Canadian consumer confidence reflects the trend. “I don’t expect any significant improvement until the end of the year.”
Based on a survey conducted by CenterState Corp. that included 140 business executives in 12 counties, Mr. Simpson said about 80 percent reported they expect to end the year with more employees than they have now. Unemployment numbers in the north country are expected to drop across the board.
“We’re expecting to see increased hiring throughout 2012,” he said, “and we’re already starting to see signs of that. In the last two months I’ve had conversations with five significant business owners in the north country whose primary concern is the availability of the work force.”
Those conversations also portend a steady climb out of the national recession, he said, as consumer and investment confidence is expected to pick up by degrees. The job sectors outperforming others in the north country are education, health services and professional services.
The manufacturing sector also is beginning to show signs of life, he said. In Oswego County, for example, Novelis Corp. invested $208 million for an expansion project that will create 100 new jobs.
“It was the largest investment in this part of Northern New York in 15 years, and we’re seeing more and more of those projects across the region,” he said.
Highlights in the north country include reopening of the Newton Falls rail line, a $63 million project that will create 235 new jobs by restoring 46 miles of rail line, and C Speed’s $5.25 million manufacturing center expansion in Potsdam, which is expected to create up to 275 jobs.
Asked by moderator Kenneth J. Eysaman, editor of NNY Business magazine, how local businesses can offer more services geared toward soldiers at Fort Drum — the region’s largest employer and economic engine — Mr. Gardner said that while the growth of the retail industry and national chains in the area are tied directly to the post, that trend poses an unusual set of challenges for local businesses.
“When you look at the institutional spending that Fort Drum does, a large amount of that is on a national level,” he said. “In many cases, local businesses may find that their competitors are not other local businesses they usually expect to compete with but businesses they’ve never heard of that operate at places around the country.”
But while he characterized the military as primarily a “national buyer,” he said there nevertheless are opportunities for local businesses that are willing to seek them.
“There are groups that routinely do business with Fort Drum, a group that does so occasionally, and a third group that doesn’t want to do it,” he said. “My advice to the last group is to get on board.”
Mr. Simpson said Fort Drum’s highly skilled work force that includes thousands of soldiers has a wealth of potential for the region to take advantage of. He suggested providing more entrepreneurial training programs for those seeking to start new businesses, as well as funding programs that can help new businesses expand when they’re ready.
We should “try to tap into the tremendous amount of education and technical expertise of these soldiers and turn that into an economic engine for a sustainable future in Northern New York,” he said. “I think there’s a lot more that we can do as a region to invest in these people.”
The outlook for the dairy industry in 2012 is promising, Mr. Matteson reported, as most farms are expected to be profitable. But because the milk supply across the nation has gone up, he said, farmers still will be combatting low prices this year. He said he hopes Congress will pass a farm bill that will eliminate some of the problems farmers are facing.
“What we need to do is ask Congress to change the system so that we can benefit regionally, because our dairy farms are really an untapped resource,” he said “The reason plants are coming here is we make high-quality milk and a lot of it, but we’re not offering the opportunities and taking down the barriers for our dairy farmers to meet those opportunities.”
Projects also are planned this year to build livestock processing facilities, he said, which will help farmers who export meat products.
“Our farmers won’t have to travel two to three hours to bring their livestock to processing facilities,” he said.
And with access to a revamped rail system in part of the north country, farmers are expected to export more of their products this year, he said. A modest export market was started two years ago by farmers who sold soybeans and other commodity products, he said, and last year the number of exports doubled.
“Once we improve the rail siding, we think we’ll be able to double our exports again,” he said.