Economic Research & Analysis

July 2014 Economic Snapshot

Highlights

Private employment rose in New York City by 8,700 between April and May 2014.
The unemployment rate remained at 7.9 percent between April and May 2014.
The Manhattan Class A office vacancy rate was 9.5 percent in June 2014, while the average asking rent was $71 PSF.
The Manhattan hotel occupancy rate in May 2014 was 94.3 percent, up from 92.1 percent in May 2013.
Passengers in NYC area airports totaled 9.9 million in April 2014, up 6.5 percent from April 2013.

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#51 Employment and Establishment Growth in New York City

This month’s Snapshot examines the industries driving employment and establishment growth in NYC.

Employment

  • Private sector jobs in New York City rose by 8,700 in May 2014 after a rise of 5,800 jobs in April 2014.
  • Government jobs in the City remained steady at around 541,000, resulting in a net overall increase of 8,700 total private and public sector jobs in May.
  • Since May 2013, private sector employment has risen by 77,700 jobs or 2.3 percent.
  • New York City’s unemployment rate remained steady between April and May 2014 at 7.9%.
  • Between April and May 2014, the number of employed City residents increased by 10,700, and the number of unemployed City residents rose by 2,800.

Note: Data in table reflects the most up-to-date values available at the time of publication. 

Industries Driving Employment and Establishment Growth in New York City

  • According to recently released employment data from the New York State Department of Labor, the number of private establishments in NYC increased by 20.2% from 2000 to 2013, while employment levels rose 8.2%. Greater establishment versus employment growth drove a 10.0% decline in the average number of employees per establishment over the period (13.2 in 2013 versus 14.6 in 2000), illustrating the continued importance of small businesses to the NYC economy. 

  • From 2012 to 2013, 11 of the 18 major industry groups gained jobs relative to their historic trendlines (see blue dots in Figure 2). Three industries underperformed their CAGRs from 2000 to 2012 (pink dots), while four industries improved upon their historically declining employment trajectories from 2012 to 2013 (gray dots).

  • In contrast to 2012, when the Construction sector saw employment gains of 3.0% over the previous year, the Construction industry fared poorly from 2012 to 2013, with employment falling 8.7% and the number of establishments falling 59.1% - the steepest declines of any industry over the year. Accommodation & Food Services had the largest year-over-year employment growth of any sector (+5.9%). The Educational Services sector experienced the greatest increase in number of establishments from 2012 to 2013, up 5.3%, but employment growth slowed relative to historic averages (+2.7% from 2012 to 2013 versus a CAGR of +3.1% from 2000 to 2012).
  • Despite downward employment trends in the industry overall, certain sub-sectors of the Finance & Insurance industry performed well from 2012 to 2013.1 Agencies, Brokerages & Other Insurance–Related Activities and Depository Credit Intermediation posted the first and third largest employment gains out of all 4-digit sub-sectors comprising more than 0.5% of total private employment, increasing 20.0% and 13.4%, respectively. Depository Credit Intermediation was also responsible for the greatest establishment gains from 2012 to 2013, up 13.9%.

  • Consistent with the growth of the Accommodation & Food Services sector overall, employment in the Restaurants & Other Eating Places sub-sector grew 6.8% from 2012 to 2013, while the number of establishments grew 4.6%. Restaurants & Other Eating Places employ more workers in NYC than any other sub-sector. 

1  Sub-sectors refer to 4-digit NAICS classifications, The North American Industry Classification System (NAICS) is a business and government standard for classifying establishments based on type of economic activity.

*Note: Annual growth refers to the percentage change in employment in each industry from 2012 to 2013, while historic employment growth reflects each industry’s CAGR from 2000 to 2012. This graph allows for comparisons between job performance in the most recent year (2013) and the average annual growth rate calculated from years prior (2000-2012).

Real Estate and Construction

Manhattan Office Market

  • In June 2014, the Manhattan Class A direct vacancy rate fell to 9.5 percent while the average rental rate stood steady at $71 PSF.
  • In the same month, the Downtown Class A direct vacancy rate fell to 11.0 percent and the rental rate remained at $55 PSF.
  • The Manhattan Class A sublease vacancy rate remained at 1.8 percent from May to June.

Construction

For the twelve months ending May 2014:

  • Building projects (including new, additions and alterations) that started construction in NYC rose by 14.6 percent, and infrastructure (non-building) project starts fell by 13.5 percent from the twelve months ending May 2013.
  • Planned space for building project starts rose by 7.3 percent from the same period in 2013.
  • 3,019 residential building project starts began construction, an 18.4 percent increase from the twelve months ending in May 2013. These starts contained 23,929 units, an increase of 16.9 percent from last year.

Tourism, Travel, and Transit

Transit Ridership

  • Total ridership on MTA subways, trains and buses in May 2014 was 238.7 million, an increase of 0.6 percent from May 2013.
  • Subway ridership in May 2014 was 152.8 million, which was a 1.3 percent increase from May 2013.

Source: Metropolitan Transportation Authority

Air Traffic

  • In April 2014, 9.9 million passengers flew into and out of the region's airports, an increase of 6.5 percent from April 2013.
  • Domestic air carriers accounted for 6.4 million passengers, a 3.3 percent increase from April 2013.
  • 3.5 million passengers traveled with international air carriers in April 2014, a 12.8 percent increase from April 2013.

Source: Port Authority of New York and New Jersey

Broadway Ticket Sales

  • Total Broadway attendance was approximately 1.1 million during the four weeks ending June 29, 2014, up 26.6 percent from the same period last year.
  • Broadway revenue during this period was about $117.8 million, up 21.1 percent from last year. 

Note: Gross revenue and attendance figures include all shows playing on Broadway during the specified period.
Source: The Broadway League

Hotel Occupancy

  • In May 2014, the average daily hotel room rate was $319, a 4.0 percent increase from May 2013. 
  • Hotel occupancy was 94.3 percent in May 2014, up from 92.1 percent in May 2013. 
  • The average daily hotel room rate increased the most in hotels charging between $270 and $340 per night.