From his 12th floor office in the Main Seneca Building, economist Richard Deitz has a bird’s-eye view of the bustling development along the Buffalo waterfront.

But there’s a lot more to the Buffalo Niagara economy than the promising waterfront development, and Deitz, the senior economist at the Federal Reserve Bank of New York, has been keeping a close watch on the region for the past 15 years.

Q: In the big picture, what’s happening in the economy here?

A: We’re doing relatively well. We’re not growing as fast as the rest of the country, but we’re pretty stable. The housing market is doing pretty well.

It’s really in large part because you’ve got sectors like education and health, which are stable parts of the economy, and sectors like leisure and hospitality, which is continuing to grow and create some jobs.

On the downside, you’ve got declines in state and local government, which is a drag on the economy. As the national economy continues to recover, we’re getting back to our normal pattern, which is that we don’t really grow very rapidly, but compared to the past, we’re doing pretty well.

Q: The Great Recession followed a very different pattern as downturns go, locally, didn’t it?

A: We entered the recession a little later than average and we lost fewer jobs. If you look at where we are now, relative to where the downturn began, we’ve actually recovered all the private sector jobs that were lost. That’s not something that the nation can say overall. It’s not true for upstate as a whole. It’s one way of pointing out that we’ve actually done better than average.

In large part, it’s because we’ve been more stable during the business cycle. A lot of this has to do with the fact that we didn’t have the housing boom and bust. The rest of the country had a deeper recession. They’re growing a little faster coming out of it. So if you look at how fast we’ve been growing relative to how fast the rest of the country has been growing in recent months, we haven’t been growing as strongly. But that’s in part reflecting that we didn’t decline as much during the downturn.

Q: If we didn’t get hurt as badly during the recession as we usually do, why isn’t our recovery stronger?

A: Housing is picking up, and that’s helping some parts of the country because they’re coming out of a deeper trench. We don’t have that impetus, which is one reason why we’re not growing as quickly.

But going back historically, over the past couple of decades, we haven’t tended to perform as well as the rest of the country during good times. That pattern is probably re-emerging. The region is relatively stable, but it doesn’t have the same growth impetus as parts of the country that are growing faster. That’s probably more in line with our historical experience.

Q: What difference does it make if we’re growing more slowly than the rest of the country or some other place? Or should we look at it as being in a vacuum and say we’re doing better than we were?

A: We tend to spend a lot of energy berating our economic performance. We’ve done this in the past, saying we’ve got to grow as fast as the rest of the country or else we’re doing something wrong.

Our economy is different from the rest of the country. We were a manufacturing town. We’re not a manufacturing town anymore. We’re a diversified economy. But we don’t have the engines of growth as some larger, more larger, rapidly growing parts of the country. The bad part is, with less job creation, it may be a little more difficult for people to find jobs in the region.

It’s not as if the economy is shrinking here. It’s just not growing as rapidly.

Q: What do you see as the engines of growth here?

A: The engines of growth tend to be the education and health sectors. Now the education and health sectors combined are the largest segment of the economy. They just recently surpassed the size of the government sector.

Some parts of that sector can draw in activity from outside the region and generate some growth. Higher education is an example of that. The medical campus, where you’re bringing people in from outside the region to do research and innovation, can be a driving force.

Another driving force is the aging population. That means the health care sector is growing, in part because the population is getting older, so more people are going to doctor’s appointments and need nursing care and everything in between.

Q: How do we get young people to stay here, and convince others to move here?

A: Younger people are tending to gravitate toward places where there’s more job growth – and that’s not here. It’s not that necessarily that they’re leaving, they’re just not coming to the region as rapidly as they are in a faster-growing part of the country.

People often see their college-age kids look for jobs outside the region. That’s pretty normal. The college-age population recirculates and looks for jobs in parts of the country where jobs are being created. Because we have a lower rate of job growth here, that means less opportunities for people looking for jobs.

Q: What impact do you see the waterfront development and the investment in the Buffalo Niagara Medical Campus and local universities having on the local economy?

A: I think we’ve already seen some of the benefits. That’s why the region has been growing slowly. These are some of the stabilizers in the local economy. They are creating more opportunities.

We know that there are high-skilled jobs being created at the medical campus and through the general high level of activity at the local colleges and universities. There are spillovers into the local economy from the research being done at the medical campus. Some of these are relatively small and some are larger, but those are positive developments in the economy. It has a lot of potential.

What you’re seeing going on at the waterfront is more of an amenity for the region. It’s not so much something that’s going to drive a lot of growth for the region, but it can make the region more attractive for people.

Q: Can the region do a better job tapping into the skills of the graduates from the local colleges and universities and the research that goes on there?

A: The research side of what’s going on at colleges and universities is just as important as what’s going on in terms of producing skilled labor.

That’s one area where we can do more to capitalize on: How to create more linkages between the private sector and local colleges and universities. We know from research that’s one pathway that promotes economic growth and development. It’s a little bit underdeveloped.

Q: Consumer debt levels here are lower than they are nationally. Why is that and how does that affect the economy?

A: It’s been another stabilizing force. Because we didn’t have such a strong housing boom and bust, consumers here didn’t have as much mortgage debt. Because housing prices didn’t rise as much, people didn’t take out as much home equity as they did in other parts of the country.

In other parts of the country where that’s happened, consumers have had to cut back because their debt levels were so high. That’s been a factor restraining growth. But here, we haven’t had that happen as much so it hasn’t been as much of a drag.