Producer-Service Firms in a Declining Manufacturing Region

An overview is provided of producer-service activity (intermediate services, sold primarily to businesses) in metropolitan Buffalo (NY) from 1970 to 1986. This period brought drastic structural changes to the region's economy, such that nonmanufacturing activity in general took a far greater share of employment and output than before. After a conceptual and empirical background is given to the study of producer services, the changes in sectoral employment structure in western New York State is presented, including producer-service employment on an industry-by-industry basis. Then, the intrametropolitan location preferences of producer-service establishments are examined. Finally, questions are addressed regarding the role that these industries play in bringing income into the region.