Eastman Kodak Co.'s bankruptcy filing on Jan. 19 sent shock waves through the Rochester region.
However, another noteworthy news item released the same day, the December employment report from the state Department of Labor, offers hope that the local economy is strong enough to withstand and surmount the problems of its leading manufacturing employer.
The Labor Department data showed 440,600 private-sector jobs in the five-county metropolitan area, 12,500 more than a year earlier. This 2.8 percent increase was a full percentage point above the U.S. average, and it was the ninth consecutive month when local job growth had topped the national norm.
Perhaps more telling, the latest figure was incrementally higher than the 439,600 private jobs in December 2007, the official starting point of the Great Recession. Rochester is one of only a handful of U.S. labor markets to have surpassed its pre-recession employment threshold and is the only Upstate New York region to do so (Figure 1).
Job creation was broad-based, with even the local manufacturing sector adding a net 200 jobs during the year-the first gain since 1997.
Still, the primary drivers of the hiring surge were the same ones responsible for Rochester's ongoing economic reorientation: education, health care and professional and business services.
Business services employment rose by 4,500 jobs in 2011, while private education and health care added 2,100.
While much uncertainty will swirl around Kodak's bankruptcy restructuring over the coming year, it is instructive to examine the evolving nature of private payroll wage disbursements to gather clues about Rochester's economic future.
Total wages paid to local manufacturing workers in the 12 months ended in March 2002 were $4.6 billion, essentially equal to those of professional and business services and private education and health care employees (Figure 2).
Flash forward to June 2011, and annualized wages paid to business services and "eds and meds" workers were $7.2 billion-double the $3.6 billion industrial total.
The upshot of this trend is clear: Regardless of how Kodak's reorganization is resolved, the continuing repositioning of the Rochester economy through the growth of its new employment leaders, as well as the spinoff growth accruing to other sectors, will help the region move forward in 2012 and beyond.
Gary Keith is vice president and regional economist at M&T Bank Corp.1/27/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email firstname.lastname@example.org.