Economic Research & Analysis

August 2016 Economic Snapshot

Highlights

Private employment in New York City rose by 21,500 between June and July 2016.
The unemployment rate rose to 5.2% over the last month, but is down from 6.6% this time last year.
Subway and bus ridership fell from June 2015, with Bridge and Tunnel transit increasing.
Hotel room rates fell by 12.5% in May 2016 compared to one-month prior.
Innovative economic activity is continuing to expand in New York City, according to our updated Innovation Index.

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Audio Resources

PODCAST

#76 Innovation Index

A discussion with Kimberly Grauer on the "Innovation Index," as well as an exploration into the role that innovation plays in the New York City economy.

Employment

  • Private sector jobs in New York City rose by 21,500 in July, following June’s gain of 12,800.
  • Government jobs increased by 200, resulting in overall gains of 21,700 jobs between June and July 2016.
  • The fastest-growing sectors were Education and Accommodation and Food Services, which gained 7,200 jobs and 5,200 jobs, respectively.
  • Since July 2015, private sector employment has risen by 93,800 jobs, an increase of 2.6% (more than the national growth rate of 1.9%).
  • The City’s unemployment rate rose to 5.2% in July 2016, up from 5.0% in June.

Innovation Index

How does one measure innovation in New York City? How innovative is our city? What does so-called “innovation” entail? The Economic Research & Analysis (ERA) team at NYCEDC answers these questions with a simple index—the Innovation Index1—that can help quantify innovation growth over time. Index inputs show metrics that contribute to the creation of innovative products, and the outputs show metrics that track economic growth in New York City. According to ERA’s figures, innovation has increased by 38% since the index began in 2003, growing at a compound annual rate of 2.7%. In short, New York City has seen substantial growth in innovation in recent years.

  • Inputs used to measure innovation can be broken down into finance, research and development (R&D) spending, and human capital, which collectively grew 2.2% between 2014 and 2015 and 46% overall between 2003 and 2015.
  • Human capital in the science and engineering fields (S&E), measured by graduate student enrollment and employment, has grown less prominently relative to the other input metrics, increasing 18% between 2003 and 2015. While the number of graduate and postdoctoral students in S&E professions grew by 5% between 2010 and 2015, the actual number of S&E employees in New York City grew by 14%, indicating that students are migrating to the City for work. Roughly 44% of the STEM workforce in New York City is foreign-born, further suggesting that a large portion of labor in the innovation economy is imported from abroad.

  • Real GCP (in 2009 dollars) within high-tech sectors exceeded $26 billion in 2015, which is more than double the 2003 value.4 Workers in the high-tech industries have also become more productive over the years, as the amount of GCP per worker steadily grew at a compound annual growth rate of 2.2% between 2003 and 2015.

Real Estate & Construction

Manhattan Office Market

  • In July 2016, the Manhattan Class A direct vacancy rate rose to 8.6% from 8.5% one-month prior, while the average rental rate remained at $81 per square foot.
  • While month-to-month vacancy and rental rates have been steady, rental rates are up 4.7% over the last year.
  • The Class A sublease rental rate rose by $2 from one-month prior, led by the Midtown and Downtown markets.

Construction

For the 12-months ending July 2016:

  • The number of residential construction projects fell by 1.1% for the twelve-month period ending July 2016. Further, non-building construction projects saw a 21.5% drop over this time. Only non-residential building projects have seen gains, rising 0.4% over the last twelve months.
  • Both the value and square footage of construction projects were down from July 2015 totals. Total new building square footage was down 36.0%, while the corresponding value of new building projects was down 35.2%.
  • 1,847 dwelling units began development across the City in July 2016.

Source: Cushman and Wakefield
Note: based on latest available data

Transit, Travel, and Tourism

Transit Ridership

  • Total ridership on MTA New York City subways and buses in June 2016 was 205.1 million, a 1.2% decrease from June 2015. Subway ridership fell 0.8% since last June, and bus ridership fell 2.1%
  • The greatest growth in ridership was for MTA Bridges and Tunnels, which saw an increase of 4.3% from last June, reaching 27.3 million.

Source: Metropolitan Transportation Authority

Travel and Tourism

Air Traffic

  • In June 2016, 11.7 million passengers flew into and out of the New York City region’s airports, an increase of 5.5% from June 2015.
  • There were 79,088 domestic flights, carrying roughly 7.6 million passengers in July 2016. This compares to the 25,583 international flights carrying 4.1 million passengers.
  • Freight transport also increased at regional airports, rising 0.8% from May 2016. This increase was led by domestic freight, which grew 19.5% from last month.

Source: Port Authority of New York

Broadway Ticket Sales

  • Total Broadway attendance was 1,239,086 during the four weeks ending August 2, 2016, down 3.0% from the same period last year.
  • Broadway revenues during this period were roughly $130.1 million, down 5.5% from last year. This was the result of average ticket prices falling to $105 from $108 last July, as well as decreased attendance.

Source: The Broadway League
Note: Gross revenue and attendance figures may not include all shows

Hotel Occupancy

  • In May 2016, the average daily hotel room rate was $305, a 4.6% decrease from May 2015.
  • Hotel occupancy was 90.0% in May 2016, down from 93.2% in May 2015.
  • These declining room and occupancy rates were present across all price classes and submarkets.

Source: PKF Consulting
Note: Based on latest available data