Economic Research & Analysis

October 2011 Economic Snapshot

Highlights

Private employment fell by 13,300 in August 2011 after an increase of 22,000 jobs in July.
The unemployment rate rose to 8.7 percent in August from 8.6 percent in July.
The Manhattan hotel occupancy rate in August 2011 was 88.8 percent, down from 89.9 percent in August 2010.
The Manhattan Class A office vacancy rate was 8.0 percent in September 2011, while the average asking rent was $66 PSF.
Passengers in NYC area airports totaled 10.5 million in July 2011, up 3.4 percent from July 2010.

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Employment

  • Private sector jobs in New York City fell by 13,300 in August 2011 after an increase of 22,000 in July.
  • In the same period, government jobs in the City rose by 4,900 resulting in a net decrease of 8,400 total private and public sector jobs.
  • Since August 2010, private sector employment has risen by 44,400 jobs or 1.4 percent.
  • The City’s unemployment rate rose to 8.7 percent in August from 8.6 percent in July.
  • Between July and August 2011, the number of employed City residents rose by 3,300 and the number of unemployed City residents rose by 1,100.

Arts, Entertainment, Recreation and Sports

NYC Employment in Select Sectors

  • The Sports subsector is an important part of New York City’s economy, particularly as part of the Arts, Entertainment and Recreation (AER) sector, which is the City’s cultural and amusement engine. There were 66,300 jobs in the AER sector in 2010 (2.2% of the City’s private sector employment), a 20.8% growth since 2000. The total 2010 sectoral payroll was $4.2 billion (1.7% of the City’s private payroll), for an average wage of $63,000, below the City average of $81,800. While the sector fared better than total private employment during this past recession, the sports subsector outpaced the growth in the overall sector. Employment in the Sports Teams and Clubs (STC) subsector in New York City was mostly resilient during the most recent recession and paid some of the highest average wages in the City. In 2010, the subsector employed 2,200 people in the City (3.3% of AER jobs) and experienced a 46.3% increase since 2000. Annual employment gains were particularly high in the mid-late 2000s before dipping slightly in 2010. Since 2000 the subsector’s employment gain far outpaced the 20.8% growth of the AER sector and the 0.4% decline in the total private sector. Furthermore, the total payroll of $513.4 million (12.3% of AER payroll) gives the subsector an average wage of $231,600, much higher than the wages in the AER sector as well as the private sector as a whole. These high wages, comparable to the high paying subsectors within the Finance industry, are attributable to the many professional athletes and executives employed in the subsector.
  • Employment in the Sports Teams and Clubs (STC) subsector in New York City was mostly resilient during the most recent recession and paid some of the highest average wages in the City. In 2010, the subsector employed 2,200 people in the City (3.3% of AER jobs) and experienced a 46.3% increase since 2000. Annual employment gains were particularly high in the mid-late 2000s before dipping slightly in 2010. Since 2000 the subsector’s employment gain far outpaced the 20.8% growth of the AER sector and the 0.4% decline in the total private sector. Furthermore, the total payroll of $513.4 million (12.3% of AER payroll) gives the subsector an average wage of $231,600, much higher than the wages in the AER sector as well as the private sector as a whole. These high wages, comparable to the high paying subsectors within the Finance industry, are attributable to the many professional athletes and executives employed in the subsector.
  • Within the STC subsector in NYC, there were 24 establishments in 2010, which included the four major sports teams–the Yankees, the Mets, the Knicks and the Rangers1. Each team has had mixed success over the 11-year period between 2000 and 2010. Chart 2 exhibits these successes2. The Yankees were the only team in the 11-year span to win their league championship, which they did twice while making the playoffs in 10 out of the 11 years. The Rangers were the next most consistent, making the playoffs five times, all in the past six seasons. The Mets started off the decade by making it to their championship series, before slumping and only making the playoffs again in 2006. The Knicks, which made the playoffs three times in the 11-year span, never made it past the first round. Regardless of the success of the teams, people continued to spend on sporting events, even during economic downturns.

Success Of Major NYC Sports Teams

  • Total expenditures by households, which are available at the Metro Area, declined during the recession, while spending on spectator sports remained steady3. The overall average household spending in the New York Metro Area (NYMA) declined slightly during the two-year period of 2009 and 2010 relative to 2008 and 20094. However, during the same periods spending on spectatorsports increased slightly from $10.4 billion to $10.5 billion5.When examined over a longer time period, NYMSA spending onspectator sports has almost doubled since the 1999-2000 period.

Consumer Spending On Spectator Sports, Bil $

1 Only teams with stadiums in New York City were considered for this analysis.
2 One point was given for making the playoffs and for each subsequent win through the championship. These were then converted to percentages to reflect how far into the playoffs each team went in their respective leagues. 100% means that the team won the championship while 0% means they did not make the playoffs.
3 Bureau of Labor Statistics, Consumer Expenditure Survey.
4 Data has been adjusted for inflation.
5 Detailed spending categories are not available for the NYMA. Numbers were derived by applying national spectator sports sector percentages to total consumer expenditure

Real Estate and Construction

Manhattan Office Market

In September 2011, the Manhattan Class A direct vacancy rate fell to 8.0 percent from 8.3 percent in August and the average rental rate rose $1 PSF to $66 PSF.

In the same month, the Midtown South Class A direct vacancy rate fell to 1.5 percent and the rental rate rose to $63 PSF.

The Manhattan Class A sublease vacancy rate remained at 1.8 percent between August and September.

Construction

For the four months ending August 2011:

  • Building projects (including new, additions and alterations) that started construction in NYC increased by 26.3 percent and infrastructure (non-building) project starts rose by 4.8 percent from the four months ending August 2010.
  • Planned space for building project starts fell by 2.3 percent from the same period in 2010.
  • 949 residential building projects with 4,468 units of housing started construction, increases of 22.6 percent and 47.5 percent, respectively over the period.

Tourism, Travel and Transit

Transit Ridership

  • Total ridership on MTA subways, trains, and buses in August 2011 was 203.6 million, a decrease of 3.4 percent from August 2010.
  • Subway ridership in August 2011 was 127.8 million, a decrease of 1.2 percent from August 2010.
Source: Metropolitan Transportation Authority

Tourism and Travel

Air Traffic

  • In July 2011, 10.5 million passengers flew into and out of the region's airports, an increase of 3.4 percent from July 2010.
  • Domestic air carriers accounted for 6.6 million passengers, a 4.1 percent increase from the same month last year.
  • 3.8 million passengers traveled with international air carriers in July 2011, a 2.2 percent increase from July 2010.

Source: Port Authority of New York and New Jersey

Broadway Ticket Sales

  • Total Broadway attendance was approximately 959,000 during the five weeks ending October 2, 2011, down 0.1 percent from the same period last year.
  • Broadway revenue during this period was about $86.0 million, up 9.7 percent from last year.

Source: The Broadway League

Hotel Occupancy

  • In August 2011, the average daily hotel room rate was $243, a 7.7 percent increase from August 2010.
  • Hotel occupancy was 88.8 percent in August 2011, down from 89.9 percent in August 2010.
  • The average daily hotel room rate increased the most in mid-priced hotels (charging between $200 and $275 per night).

Source: PKF Consulting