Economy of Buffalo, New York
The economy of Buffalo, New York mostly consists of industrial, light manufacturing, high-tech, and service-oriented private sector companies. The region’s economy has diversified across multiple industries following a long period of deindustrialization in the late 20th century.
History
[edit]Prior to the 19th century, the regional economy was largely agrarian and localized. The trajectory of Buffalo's economy shifted dramatically following the construction of the Erie Canal (1817-1825), which transformed the city into a major transshipment hub for grain and goods moving between the Great Lakes and the East Coast.
The late 19th and early 20th centuries saw rapid industrialization, driven largely by the advent of alternating current and access to cheap hydroelectric power generated from nearby Niagara Falls. This period established Buffalo as a major center for steel manufacturing, automobile production, aircraft design, Great Lakes shipping, and grain storage. By the 1950 United States census, Buffalo had reached its peak economic influence as the 15th largest city in the country, the nation's largest inland port (12th overall), second-largest rail center, sixth-largest steel producer, and eighth-largest manufacturer.[1]
In the latter half of the 20th century, Buffalo experienced severe deindustrialization, mirroring the broader decline of the Rust Belt. The opening of the St. Lawrence Seaway in 1959 bypassed the city's port, and major manufacturers relocated or shuttered operations. Major steel production eventually ceased in the area, although several smaller steel mills remain in operation. The local economy has since transitioned toward healthcare, education, and light manufacturing.
Employment
[edit]Employment in Buffalo shifted as its population declined and manufacturing diminished. Buffalo's 2005 unemployment rate was 6.6%, in contrast to New York State's 5.0% rate.[2] From the fourth quarter of 2005 to the fourth quarter of 2006, Erie County had no net job growth, ranking it 271st among the 326 largest counties in the country.[3]
Job growth saw a temporary upswing in the late 2000s; unemployment dropped to 4.9% in July 2007 from 5.2% in 2006.[4] Historically, the area's manufacturing sector showed consistent job losses, shedding over 17,000 jobs between early 2006 and the 2010s. In contrast, educational and health services added over 30,400 jobs in 2006, and business and finance sectors saw growth during the same period.[5]
Life sciences
[edit]Buffalo's modern economy includes a growing bioinformatics and medical research sector. Much of this is anchored by institutions such as the University at Buffalo and Roswell Park Comprehensive Cancer Center. These institutions, along with several others, are concentrated within the Buffalo Niagara Medical Campus. Other partners include the Buffalo Hearing & Speech Center, Buffalo Medical Group Foundation, Hauptman-Woodward Medical Research Institute, Kaleida Health, Olmsted Center for the Visually Impaired, Cleveland BioLabs, and Upstate New York Transplant Services. Additionally, DNA samples used in the Human Genome Project were collected from anonymous donors from Buffalo.
The medical campus also hosts early-stage technology companies and commercialization firms that partner with the New York State Center of Excellence in Bioinformatics & Life Sciences, such as Empire Genomics.[6]
Banking
[edit]
Buffalo serves as the headquarters for M&T Bank, a large regional bank.[7] Historically, Marine Midland Bank operated for decades from downtown Buffalo before being acquired by HSBC and rebranded as HSBC Bank USA. HSBC later reduced its local operations in Buffalo and Upstate New York, closing retail banking centers. Many of these locations were subsequently acquired by First Niagara Bank.
Other financial institutions, such as Bank of America and KeyBank, maintain corporate operations in Buffalo. KeyBank expanded its local presence significantly after acquiring First Niagara in 2015.[8] Citigroup operates regional offices in the neighboring suburb of Amherst. Buffalo also has a presence in the debt collection industry.[9]
Prior to the KeyBank acquisition, First Niagara Bank had moved its headquarters to downtown Buffalo from nearby Lockport in 2009.[10] First Niagara expanded its reach by purchasing branches from PNC Financial Services after PNC was required by the United States Department of Justice to divest locations following its acquisition of National City Corp.[11][12] In 2011, First Niagara also acquired HSBC Bank's Western New York branches.[13]
Other
[edit]
Buffalo is home to Rich Products, a family-owned food manufacturer.[14] Canadian brewer Labatt moved its US headquarters to Buffalo in May 2007.[15] The city's location on the U.S.-Canada border facilitates cross-border trade, with five bridges connecting the region to Ontario. Other food corporations with a presence in the area include Sorrento Lactalis, General Mills (which operates a cereal mill), and Del Monte Foods, which manufactures Milk Bone dog biscuits on the city's East Side. The regional supermarket chain Tops Friendly Markets is headquartered in nearby Williamsville, and Delaware North operates from its headquarters in downtown Buffalo.[16]
New Era Cap Company, a sports-licensed headwear company, is based in Buffalo and opened its current headquarters in the former Federal Reserve Building downtown in 2007.[17]
Historically, the windshield wiper maker Trico operated three major manufacturing facilities in Buffalo, but has since relocated operations to Mexico and moved its head office to Michigan.[18] Trico Plant No. 1 was placed on the National Register of Historic Places in 2001.
For many years, Buffalo was the nation's second-largest rail center. Peak traffic was reached during World War II, but declined significantly in the postwar era due to shifts toward air travel and the construction of the New York State Thruway.[19] By 1980, the major rail hub operations in the city had ceased.
Regionally based insurance companies with headquarters in Buffalo include Merchants Insurance Group and Lawley Insurance.
Some heavy industry remains in Buffalo and its surrounding area. Ford maintains a stamping plant in South Buffalo,[20] and General Motors operates the Tonawanda Engine plant by the Niagara River.[21] In addition, Tesla partnered with Panasonic and New York State to operate Gigafactory 2 on a former Republic Steel site. The facility manufactures photovoltaic modules and solar cells.[22] The current incarnation of Republic Steel maintains a facility in nearby Blasdell.[23]
The city also hosts 43 North, a venture capital startup competition funded by the state's Buffalo Billion program. It awards capital, mentorship, and workspace in the Buffalo Niagara Medical Campus to winners annually.[24]
Standard of living
[edit]The loss of manufacturing jobs, suburbanization, and changing economic forces have historically made Buffalo one of the poorest among U.S. cities with populations of more than 250,000. An estimated 28.7–29.9% of Buffalo residents live below the poverty line, behind Detroit and Cleveland.[25] Buffalo's median household income is $27,850, though the median household income for the metropolitan area is higher at $57,000.[26]
The Buffalo-Niagara Falls metropolitan area features lower housing costs compared to national averages. The quarterly NAHB/Wells Fargo Housing Opportunity Index (HOI) noted that nearly 90% of new and existing homes sold in the metropolitan area during the second quarter were affordable to families earning the area's median income.[2] Archived 2019-05-05 at the Wayback Machine
Buffalo has faced historical issues with vacant and abandoned housing. Since 2000, the city has pursued demolition programs to manage the inventory of vacant properties, including a state and local funded initiative to tear down 5,000 structures in the late 2000s and early 2010s.[27]
The city has seen investments in infrastructure, localized construction programs, and waterfront development throughout the 2010s.[28]
Principal employers
[edit]According to the city's 2019 Comprehensive Annual Financial Report,[29] the principal employers in the Buffalo Metropolitan Area are:
| # | Employer | # of Employees |
|---|---|---|
| 1 | State of New York | 23,600 |
| 2 | Federal Executive Board (United States of America) | 15,000 |
| 3 | Kaleida Health | 8,301 |
| 4 | M&T Bank | 7,400 |
| 5 | Catholic Health | 7,184 |
| 6 | University at Buffalo | 7,076 |
| 7 | Buffalo City School District | 6,528 |
| 8 | Tops Markets | 5,374 |
| 9 | Erie County | 5,010 |
| 10 | Erie County Medical Center | 3,450 |
Major companies located in the Buffalo Niagara metro area
[edit]This is an incomplete list of notable companies with major operations or headquarters in Buffalo or within the surrounding area.
References
[edit]- ^ Bisco, Jim (1986). A Greater Look at Greater Buffalo. Windsor Publications. p. 58. ISBN 978-0-89781-198-9.
- ^ "See Erie County". Labor.state.ny.us. Archived from the original on 2014-06-30. Retrieved 2014-09-14.
- ^ "BLS, Table 1. Covered establishments, employment, and wages in the 326 largest counties, fourth quarter 2006". Bls.gov. Archived from the original on April 19, 2014.
- ^ "New York". Labor.state.ny.us. Archived from the original on 2014-06-30. Retrieved 2014-09-14.
- ^ "bizjournals.com". Bizjournals.com. October 24, 2012. Archived from the original on May 8, 2014.
- ^ "About the Founder". Empiregenomics.com. March 18, 2008. Archived from the original on June 16, 2012.
- ^ "M&T Bank : Who Is M&T". Mtb.com. Archived from the original on October 21, 2013.
- ^ "About Key | KeyBank". Key.com.
- ^ Thompson, Carolyn (January 5, 2010). "Buffalo's debt collectors accused of bullying =". Associated Press. Archived from the original on January 8, 2010. Retrieved 2010-01-05.
- ^ "First Niagara 2009". Fnfg.com. Archived from the original on March 14, 2012.
- ^ "KDKA-TV".
- ^ "United States Department of Justice" (PDF). Archived from the original (PDF) on May 31, 2009. Retrieved 2013-08-01.
- ^ First Niagara to buy HSBC bank branches wivb.com Published 2011-07-31. Archived May 27, 2013, at the Wayback Machine
- ^ Rich Products Corporation :: Our Business/ Archived October 6, 2011, at the Wayback Machine
- ^ LABATT USA: Company opens new headquarters in Buffalo » Business » Tonawanda News/ Archived October 24, 2013, at the Wayback Machine
- ^ [1]/ Archived June 26, 2012, at the Wayback Machine
- ^ History Timeline of the New Era Cap Company/ Archived July 30, 2013, at the Wayback Machine
- ^ "METRO BUSINESS; Trico Opens Buffalo Site". The New York Times. October 20, 1999. Archived from the original on April 10, 2014.
- ^ "Buffalo Central Terminal – Decline & Abandonment, 1945 – 1990". Buffalohistoryworks.com. Archived from the original on April 4, 2012.
- ^ Buffalo Stamping Plant website
- ^ "GM Tonawanda, Buffalo, New York Plant Info". GM Authority. 2 January 2018.
- ^ Robinson, David. "Tesla says it will start making solar roofs in Buffalo by end of year", The Buffalo News, August 2, 2017
- ^ "About Us". republicsteel.com.
- ^ Rader, Bill. "How This $5 Million Business Competition Highlights The Best Of Entrepreneurship". Forbes. Retrieved 2017-07-13.
- ^ Buffalo 3rd Poorest Large City Deprecated link archived 2013-01-05 at archive.today. WGRZ TV. Retrieved October 14, 2008.
- ^ Buffalo falls to second-poorest big city in U.S., with a poverty rate of nearly 30 percent. Buffalo News. Retrieved September 2, 2007. [dead link]
- ^ Vacant Houses, Scourge of a Beaten-down Buffalo. New York Times. Retrieved September 14, 2007.
- ^ "Signs of economic revival finally appear - City & Region - The Buffalo News". Archived from the original on 2014-01-28.
- ^ "City of Buffalo 2019 Comprehensive Annual Financial Report" (PDF). Retrieved November 11, 2020.
- ^ "Archived copy" (PDF). Archived from the original (PDF) on 2018-05-25. Retrieved 2018-05-24.
{{cite web}}: CS1 maint: archived copy as title (link) - ^ James Gaskin (May 14, 2017). "Top 10 tech startups blooming in Buffalo". Geektime.
