Contact: Mike Loughran, (212) 669-3747 March 1, 2012
CONSTRUCTION SECTORS CONTINUE TO DECLINE
NEW YORK, NY – An excerpt from City Comptroller John C. Liu’s upcoming budget report paints a mixed picture for the City’s economy, finding that some sectors are enjoying strong growth while others have not yet returned to full health. The outlook for 2012 is positive but precarious.
“Our economy and more specifically our industries are in a state of flux, but New York City is adapting as the job market evolves,” Liu said. “We must work to cultivate growth and expand opportunities for all New Yorkers as uncertainty surrounds the City’s economic future.”
The main driver of employment-related concerns was the deteriorating business conditions in the financial industry. Wall Street firms had a collective loss of $3 billion in the third quarter, and the Comptroller’s office expects them to record their least profitable year since 2008. The financial sector shed jobs, and by December, employment levels in banking and securities were below that of the year prior.
The financial sector was not the only signature industry to feel the pain of job loss during 2011. In fact, the information sector, with the exception of a modest gain in the motion picture and television industry, recorded losses across key components:
- Publishing contracted by 2,000 jobs, bringing the total losses in the industry over the past 11 years to 18,000.
- Broadcasting declined by 500, while telecommunications saw its rolls drop by 800.
- In addition, the City’s construction industry contracted by 4.2 percent, while nationally the sector expanded.
Liu cautioned that since the contraction in the information sector is mainly due to technology and industry restructuring, an improved national economy will do little to reverse this downward trend.
In contrast to the problems in the financial and information sectors, Liu also noted that there were a few bright spots in the City’s job picture:
- Professional and business services employment increased by 19,200 over the previous year—especially good news since this sector contains the highest average salaries next to finance.
- Bars and restaurants increased employment by 6,800 and retail trade employment was up 13,800. These jumps, and the steady rise in hotel jobs, were mainly due to increased tourism.
NYC and U.S. Payroll Job Change
December 2011 vs. December 2010
Source: NYS Department of Labor and Bureau of Labor Statistics.
Note: Jobs are based on annual average of monthly data.
Economists in the Comptroller’s office also looked at the specifics surrounding the City’s economy, which expanded by 2.9 percent in 2011. However, a number of key indicators began sputtering in the second half, raising concerns about the strength of a local recovery for 2012.
While New York City’s economy outperformed the nation for all of 2011, the data mask uneven performance throughout the year. The first half of 2011 saw brisk growth in the City’s economy, but second-half progress was stalled due to business conditions on Wall Street and fear of a potential Eurozone debt crisis.
The Comptroller’s office also cautioned that the most significant risk to the New York City economy remains the European debt crisis and the resulting stresses on U.S. and European banks. In fact, this is the first time in many years that a European financial crisis has threatened to migrate across the ocean.
“There is an old adage that when the United States sneezes, Europe catches a cold. Let’s hope the opposite doesn’t happen, because that cold could have devastating effects on the City’s economy,” Liu said.
Comptroller Liu will release his full report on March 5.