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Kennedy: Glimmer of hope for area's economy

Kennedy: Glimmer of hope for area's economy

It was just a thread of optimism, but worth grabbing hold of: The Albany metro isn’t likely to feel the full weight of any economic collapse caused by the coronavirus pandemic.

The sliver of hope came via Brookings Institution, a research group in Washington, D.C., which crunched data to see how significant a job share five industry sectors have in nearly 400 U.S. metropolitan statistical areas. The five sectors recently were cited by Mark Zandi, chief economist at research firm Moody’s Analytics, as “most at risk” from the pandemic.

In the race to “flatten the curve” -- to slow the spread of Covid-19, the illness caused by the virus, so the health care system isn’t overwhelmed – most economic activity in the country has ground to a halt.

A recession is anticipated, but just how bad it will be will depend on how long commerce is shuttered. Some projections put the unemployment rate as high as 30 percent in the second quarter; a sharp drop in gross domestic product also is expected.

Zandi identified five “vulnerable” sectors –- mining/oil and gas; transportation; employment services; travel arrangements; leisure and hospitality –- that Brookings then used to map what regions of the country were at high economic risk from the virus.

The five sectors represented some 24.2 million jobs in 2019, or 16.5 percent of all U.S. jobs, according to Brookings.

By metro area, high on the at-risk list were several communities in Texas, where the energy industry represents 30 percent to 40 percent of the jobs.

Brookings also put the tourist meccas of Atlantic City, Las Vegas and Orlando on the list, where as much as a third of the jobs are in hospitality.

“In the event that the pandemic tips the economy into a significant nationwide recession, very few places or industries will emerge unscathed,” Brooking said in the study

But the report singled out five metros among the 100 largest as “the economically safest,” identifying them as “mostly tech-oriented university towns.”

That’s where the Albany area showed its face, accompanied by Provo, Utah; Durham-Chapel Hill, N.C.; Hartford, Conn.; and San Jose, Calif.

Mark Muro, senior fellow and director of the Brookings Metropolitan Policy Program, told me the Albany metro made the list because it was “not deeply involved in any of those” five at-risk sectors. Although we may brag about Saratoga Race Course as a tourist attraction, our hospitality jobs aren’t as numerous as, say, Atlantic City’s.

In fact, the Brookings numbers identified 54,700 jobs in the five sectors in the local metro (comprising Albany, Rensselaer, Saratoga, Schoharie and Schenectady counties), or 12.2 percent of the area’s jobs.

Our saving grace? The well-known three-legged stool of government, education and health care that underpins the Capital Region economy.

“In hard times, times of slowdown,” those three are “very safe” sectors and their “jobs are relatively stable,” Muro said.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]

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