Download Ithaca Business Index February 2016

Department of Economics
Ithaca Business Index
February 2016
The Ithaca metro area, which encompasses all of Tompkins County, saw a sharp increase in
economic activity in February. The Ithaca Business Index vaulted 3.06 percent to a level of
168.67 from a revised mark of 163.66 in January. The index was firing on all cylinders with
gains in employment, retail sales, hotel room demand, home sales, air traffic, and building
permits. Help wanted advertising held steady. Compared to February 2015, economic activity
was up 2.47 percent.
The Ithaca metropolitan area gained 900 jobs in February bringing total nonfarm
employment to 71,600 on a seasonally adjusted basis. There were 70,400 jobs in
February 2015. The retail sector, which had been stagnant, added 200 jobs.
Another 400 jobs were added in the leisure and hospitality sector, which has been
growing steadily over the past two years.
Retail sales in Tompkins County improved 3.10 percent compared with January
2015 on a seasonally adjusted basis. This is an encouraging sign as the retail
The Ithaca Business Index is a public service of Ithaca College
Department of Economics • (607) 274-3200 • [email protected]
sector has been sluggish for several years. On a year-to-year basis, retail sales
were up 7.45 percent.
Demand for hotel rooms in Ithaca popped 14.27 percent in February after seasonal
adjustment. Compared to February 2015, hotel room demand was up 4.25 percent.
When the new supply of hotel rooms becomes available this sector could improve
even faster.
Ithaca realtors sold 89 homes in February on a seasonally adjusted basis compared
to 46 the previous month for a gain of 93.46 percent. Compared to February 2015
home sales were up 68.91 percent. Home prices, however, were lower. The median
home sold for $169,000 compared to $180,000 in February 2015.
Help wanted advertising inched higher by 0.70 percent. Compared to February
2015, help wanted advertising was down 0.17 percent.
The number of passengers boarding at Ithaca Tompkins Regional Airport soared
19.15 percent in February after seasonal adjustment. Compared to February 2015,
enplanements were up 6.28 percent.
Residential building permits issued in Tompkins County improved 21.63 percent
after seasonal adjustment. Compared to February 2015 building permits were down
2.92 percent.
Sector
Change
(from last month)
Change
(from last year)
Employment
▲ 1.27 %
▲ 1.70 %
Retail Sales
▲ 3.10 %
▲ 7.45 %
Hotel Room Demand
▲ 14.27 %
▲ 4.25 %
Home Sales
▲ 93.46 %
▲ 68.91 %
Help Wanted Advertising
▲ 0.70 %
▼ 0.17 %
Air Passengers
▲ 19.15 %
▲ 6.28 %
Building Permits
▲ 21.63 %
▼ 2.92 %
Ithaca Business Index
▲ 3.06 %
▲ 2.47 %
It has been some time since the Ithaca Business Index advanced so dramatically
and with so many of the indicators flashing green. The increase of 3.06 percent over
January is a record amount. The gains in employment, retail sales, and home sales
are especially significant. Let’s see if the strength persists in the months ahead.
The Ithaca Business Index is a public service of Ithaca College
Department of Economics • (607) 274-3200 • [email protected]
We can benchmark our estimates of economic activity in the the Ithaca Metro region
against other measures. For instance, the Bureau of Economic Analysis (BEA)
estimates real GDP for metro regions on an annual basis. The BEA uses a “valueadded” approach to estimate economic activity. This is completely different from the
approach we use for the Ithaca Business Index. Nevertheless, both measures
purport to measure the growth rate of the regional economy.
The BEA estimates are dollar figures, but the percentage change is an estimate of
economic growth. Similarly, the percentage change in the Ithaca Business Index is
a measure of economic growth. The BEA estimates are not as timely as ours and
are available only through 2014 at this point in time. A comparison of the two
measures indicates some agreement and some disagreement.
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Generally, the Ithaca Business Index shows slightly higher growth rates than the
BEA’s estimates. In the years when it is higher, the Ithaca Business Index is about
1.3 percent higher. In two years, 2008 and 2009, the Ithaca Business Index was
lower. Indeed, the two approaches yield quite different results for these two years.
However, the average difference between the two approaches for all 11 years is 0.6
percent.
The general concordance between the two radically different approaches to
estimating economic growth gives us confidence that our approach is relatively
accurate. In addition, the BEA’s estimates typically vary by 1.3 percent from year to
year. Our estimates vary about the same amount, but slightly less at 1.0 percent.
The fact that both approaches have about the same variance also lends credence
to their efficacy.
The Ithaca Business Index is a public service of Ithaca College
Department of Economics • (607) 274-3200 • [email protected]