No Recession Looming, H.V. Business Leaders Say

MIDDLETOWN – A panel of local industry experts convened on Thursday to discuss the state of the Hudson Valley’s economy and the strength and resilience of its business community. The “Real Estate & Economic Forum: Driving the Hudson Valley Forward” hosted by Orange Bank & Trust featured leading banking, real estate and construction industry voices – including Hudson Valley Investment Advisors Inc., The Business Council of Westchester, Hudson Gateway Association of Realtors, Construction Contractors Association of the Hudson Valley, and the Construction Industry Council of Westchester & Hudson Valley – discussing issues critical to the region’s continued growth.

The panel agreed the economy has stabilized after a difficult and uneven recovery spanning the past three years, and are optimistic for continued growth. At the forefront of issues impacting the business community are workforce shortages, inflation and supply-chain pressures, housing, construction and infrastructure initiatives, and the lending environment.

Michael Gilfeather, President and CEO of Orange Bank & Trust welcomed the virtual audience of more than 120 attendees, and the program was moderated by Greg Sousa, Executive Vice President and Chief Commercial Banking Officer at Orange Bank & Trust.

Panelists included Carmen Bauman, President-elect of the Hudson Gateway Association of Realtors and Associate Broker at RM Friedland; John T. Cooney Jr., Executive Director, Construction Industry Council of Westchester & Hudson Valley, Inc.; Dr. Marsha Gordon, CEO, The Business Council of Westchester; Gus Scacco, CEO, Hudson Valley Investment Advisors, Inc; and Alan Seidman, Executive Director, Construction Contractors Association of the Hudson Valley.

“On behalf of the bank, we are thrilled to be launching this timely program that’s deeply important to the local business community, bringing focus to topics that are essential to the health and growth of the Hudson Valley’s economy,” said Gilfeather.

Scacco, a Wall Street industry veteran and one of the Hudson Valley’s leading financial experts, presented an in-depth look at the state of the economy, and the key factors driving and hampering its growth.

“We’ve been hearing about how we are going into a recession for over a year, and the data does not support that,” said Scacco. “Here are the reasons why: construction, as well as consumer activity, is very strong; the GDP continues to power ahead; inflation is coming down substantially; interest rates are calming; supply-chain levels have normalized; housing prices have come down nationally, although not in the Northeast; wages, job openings and quit rates are trending lower, which provides more stability to employers; and small businesses are feeling a lot better. Unless there’s some sort of a shock, we’re not having a recession in the next six months, and we’re positively optimistic about the first half of 2024.”

“Our residential real estate market has been experiencing high demand and high prices with the current lack of inventory only pushing prices higher. Consumers’ challenges are further complicated by record level interest rates,” said Bauman. “Commercial real estate is more complex: multifamily remains strong, hospitality is on the cusp of a rebound, the industrial warehouse sector has growth largely driven by the prevalence of e-commerce during the pandemic – while the inverse became true for traditional retail – and office space remains in flux as almost all companies, large and small, are reconsidering their needs.”

“The state of the construction industry can be described as robust, and its stimulus is essentially driven by immense growth in commercial and health care-focused development, increased federal investment such as the Infrastructure Investment and Jobs Act (IIJA), and municipal spending supported by the American Rescue Plan Act (ARPA),” said Cooney.

“Companies have met this increased demand by investing in new and more productive equipment, but also by investing in workforce development for existing employees, and leading efforts to attract a new and more diverse workforce.”

“Businesses are now doing well and it’s a reflection of the health of the Westchester and Hudson Valley economies,” said Gordon. “One of the most persistent challenges for businesses that we’ve been helping our members with is strengthening efforts to effectively attract and retain top talent. But overall, we’re gratified to see significant growth in so many key sectors of our economy, including health care and biosciences being driven by Regeneron, film and video thanks to Lionsgate, and professional services, which continue to be a core foundation of the Westchester economy.”

“There is plenty of work to keep the construction sector active for the foreseeable future,” said Seidman. There is a large state project starting in early 2024 in New Hampton, and also new development and improvements happening at West Point. Unfortunately, we are also seeing an exodus of businesses and people leaving New York, many citing high taxes and unfriendly regulatory environments, and we have to be mindful of those negative trends also impacting the economy.”