Capital District - Economy

Economy

The economy of the Capital District was at the beginning of settlement by Europeans dominated by the fur trade, especially in beaver pelts, hence Albany's early name of Beverwyck. But as settlement grew and matured the economy became traditionally anchored by several large manufacturing industries, such as the glove and leather industry in Fulton and Montgomery counties, American Locomotive and General Electric in Schenectady, first steel and then the shirt industry in Troy, and lumber in Albany and Watervliet. Now the economy of the region is heavily anchored by the state as the largest employer in the eleven-county region, employing thirteen percent of the non-farm workforce in the Capital District. One-fourth of the area's workforce works for the state or local governments, with the state of New York, the Federal government, and Albany County as the first, third, and eighth largest employers in the area. There have traditionally been three legs holding up the region's economy- state government, heath care, and education. Health care provides a large and growing sector of the region's economy as well. Albany Medical Center, St. Peter's Health Care Services, and Northeast Health are the fourth, fifth, and sixth largest employers in the eleven-county Capital District. Price Chopper, a privately owned grocery chain headquartered in Schenectady, is the 13th largest employer in the entire state of New York with 14,000 employees.

Manufacturing has been disappearing but is still important, and makes up six percent of the non-farm workforce. Major factories in the area are owned by General Electric, still the region's largest private-sector employer, and spin-offs such as Momentive Performance Materials' plant in Waterford, Saratoga County and the SABIC plant in Selkirk, Albany County. Mechanical Technology Inc. (MTI) of Schenectady, another spin-off from General Electric, has helped put the region on the map for alternative energy production, as has its own spin-off, Plug Power of Latham and the Center for Future Energy Systems at Rensselaer Polytechnic Institute. The economy in recent decades has been pushing towards the high-tech with such promotions as the moniker of Tech Valley. Tech Valley is a marketing name first coined by Walter Altes in 1998 to promote the Hudson Valley/Capital District area as a high-tech industry area similar to Silicon Valley and Boston.

The Capital District has historically been linked to banking, finance, and insurance. Bank of Albany, founded in 1792, was the second bank established in the state, and American Express was founded in Albany. Finance and insurance employs six percent of the workforce in the area. Many important regional and national banks are headquartered in the area, such as Trustco Bank, and many national banks have regional headquarters in Albany, such as Bank of America and KeyBank. Albank, Norstar, Troy Savings Bank, Hudson River Bankcorp, and KeyBank were all founded in the area and have either moved their headquarters out of the region, such as KeyBank in 1994, or been merged into larger companies such as Hudson River Bankcorp into First Niagara Bank, out of Buffalo. Though Bank of America is the nation's largest bank it ranks only sixth in the region in bank deposits. Citizens Bank is the region's largest bank by market share of deposit holdings (32.5%), while Trustco Bank is largest by number of branches (52) in the area, as defined by the Federal Deposit Insurance Corporation.

In 2006 Forbes ranked the Albany-Schenectady-Troy MSA the 18th best place for business in the nation. It was the second highest ranking in the Northeastern United States and the highest in the state. The Glens Falls MSA ranked 85th overall, and 35th for income growth, in the small metro category. According to the United States Census Bureau the Capital District's gross domestic product (GDP) was $32.345 billion in 2008 (in constant 2001 US dollars), up 3.4 percent from the year before. The region ranked 42nd in growth rate, and as the 56th largest metro area.