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Comptroller Report Finds NYC Economy Strong in Most Areas



New York City Comptroller Scott Stringer and family march on 55th Celebrate Israel Parade in New York on 5th Avenue. Photo Credit: Shutterstock

By Henrietta Fishman

New York City’s economy is generally strong, and in particular commercial real estate, according to City Comptroller Scott Stringer’s latest report. Stringer reported that the city’s economic growth outpaced the nation in the second quarter, with gross city product increasing by 3.4%, compared to 2.1% growth for U.S. GDP, according to the press release from the comptroller.

Stringer’s economic update shows that the city experienced solid job and earnings growth, notably a growth in average hourly wages of 4.4%. Hiring grew by 2.6% on an annualized basis, although largely in industries paying less than $62,000 per year.

New commercial leasing activity in Manhattan increased by more than 10 million square feet in Q2, representing a year-over-year increase of 21.5%. Overall rental rates increased to $74.15-per-square-foot.

However, despite the increase in new commercial leasing, Manhattan’s overall commercial vacancy rate increased to 10.5% in Q2 from 92% a year ago, according to the comptroller.

“Our latest economic update reveals that New York City is on a strong economic footing. This is reflected in higher wages, a near record low unemployment rate, strong job growth, and continued strength in most other sectors,” said New York City Comptroller Scott M. Stringer. “Despite the expansion, many New Yorkers are still feeling the squeeze of soaring costs on everything from rent to childcare as a majority of the job growth continues to be in lower-paying industries”

Released every three months, the Comptroller’s Quarterly Economic Update (QEU) tracks New York City’s economic health and analyzes the city’s economy in a national context.

Here are some highlights of the report:

  1. Personal income tax (PIT) revenues surged 25.3 percent or $852.6 million to more than $4.2 billion in Q2 2019. The unusual increase was driven by a 44.3 percent or $567 million jump in estimated tax payments compared to a year ago, largely attributable to high-end taxpayer response to changes in federal tax law enacted in 2017. Withholding tax revenues – a better proxy for income growth – rose by a healthy 7.9 percent in the second quarter, albeit down from the 11.8 percent increase in Q2 2018.
  2. Average hourly earnings (AHE) of all private NYC employees rose 4.4 percent on a year-over-year basis to $37.52 in Q2 2019, the largest second-quarter increase since 4.7 percent growth in Q2 2017.
  3. Total venture capital investment in the New York metro area hit a record second-quarter high of $4.11 billion in 2019. Venture capital investment was $4.48 billion in Q1 2019.

4.Leading economic indicators for the city’s economy signaled continued expansion. The current business condition index provided by ISM-New York, Inc., which measures the current state of the economy from the perspective of business procurement professionals, declined for the third consecutive quarter to 58.6 percent in Q2 2019, down from the record high of 74.7 percent in Q3 2018. The ISM six-month outlook rose to 61.7 percent in Q2 2019. Both these indices are well above a reading of 50 percent indicating projected growth across a majority of industry experts.

5.Initial unemployment claims decreased for the sixth consecutive quarter 1.2 percent — to its lowest second quarter level on record at 27,278.

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