NYC EmploymentReport Jan14
Transcript of NYC EmploymentReport Jan14
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C&W ECONOMIC UPDATE
NEW YORK CITY EMPLOYMENT
A Cushman & Wakeeld Research Report JANUARY 30, 2014
RECORD SETTING EMPLOYMENTIN NEW YORK CITY
The latest employment report on New York
City showed the city at an all-time high in total
number of jobs and recording the strongest single
year of employment growth in its history.
In December 2013, New York City had a total of 4.002 million
people on payrolls as the number of jobs passed the 4.0 million
mark for the rst time in history. To put this in perspective, there
are only nine states (excluding New York State) that have more
payroll jobs than New York City.
To reach this milestone, the City experienced the strongest
employment growth in its history during 2013. On a seasonally
adjusted basis, payroll employment in New York City increased by
93,700 jobs between December 2012 and December 2013. The
previous record job growth was in 1999 when the City added
93,400 jobs.
Since December 2010, employment in New York City has
increased more than 262,000 jobs, the best three year period
since 1996 to 1999. Continued on Page 2
4,002,000Number of workers in New York City, the rst
time in history employment exceeded four million
SOURCE: U.S. Bureau of Labor Statistics
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T h o u s a n d s o f P e r s o n s
NEW YORK CITY PAYROLL EMPLOYMENT
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A Cushman & Wakefeld Research Report
C&W ECONOMIC
UPDATE
The key drivers of this growth have been three sectors:
• Education and health employment is up over 100,000 jobs sinceNovember 2009 accounting for nearly one third of the job growth.
In 2013 employment in these industries rose 46,300 jobs.
• Tourism is booming. In 2013 slightly more than 54 million visitors
came to New York City, a record. Not surprisingly, employment in
leisure and hospitality as well as retail have grown strongly. In 2013,
these two sectors added 27,000 jobs.
• However, despite creative industries such as Technology, Advertising,
Media and Information (TAMI) growing strongly, employment in the
three key ofce-using sectors was not as healthy as the city’s overall
performance in 2013.
• Ofce-using sectors (the sum of nancial services, professional &
business services and information (i.e. media)) increased only 8,700
jobs. These three sectors account for approximately one-third ofall the jobs in New York City, but they accounted for only 9.3% of
employment growth in 2013.
All three of the ofce-using sectors were weak in 2013. The nancial
services sector added only 3,700 jobs; professional & business services
3,900 jobs and information only 1,200 jobs.
This slow growth in the key ofce-using sectors goes a long way to
explain the performance of the Manhattan ofce market in 2013 where
we saw substantial leasing but more space came on the market than
was taken off. Overall absorption in 2013 was -3.65 million square feet,
the weakest by far since 2009 and the Manhattan vacancy rate
increased to 11.0% from 9.5% at the end of 2012. Another contributor
to the negative absorption was a signicant increase in the supply ofofce space in Manhattan as several projects were completed. In all
approximately 3.6 million square feet of new ofce space was added to
the inventory last year.
EMPLOYMENT OUTLOOK
New York City is expected to continue experiencing healthy
employment growth in 2014. Accelerating national economic growth,
continuing strong trends in the education and health, tourism and
TAMI sectors and a better performing nancial services sector will
lead to further solid gains in New York City employment. Historically
an important contributor to the local economy, as of December 2013
nancial services employment was only 900 jobs higher than inAugust 2011.
Financial services companies have faced an uncertain environment over
the past two and a half years. First, the eurozone debt crisis has
constrained European nancial institutions, many of which are large
employers in New York City. Additionally, many of the key regulations
required by the Dodd-Frank law (such as the Volcker Rule), which was
passed in July 2011, were not nalized until December 2013. With the
eurozone economies on the mend and the Dodd-Frank regulations in
place, the environment for nancial institution in New York has
improved. Add to this a stronger national economy, which should boost
demand for nancial services, and we anticipate employment in thissector to grow in 2014.
CONCLUSION
Healthy global, national and local economic conditions and the
resulting stronger growth in ofce-using employment should lead to
more absorption of ofce space in Manhattan in 2014. The anticipated
growth in demand caused by faster employment growth will be
partially offset by the completion of one more major ofce building,
the three million square foot One World Trade Center. Nevertheless,
we anticipate stronger job growth will lead to a declining vacancy rate
in Manhattan. We expect the vacancy rate at the end of 2014 to be
lower than that at the end of 2013 across most submarkets. Thisshould lead to upward pressure on rents. Overall, 2014 is expected to
be a year of healthy improvement in the Manhattan ofce market.
For more information, contact:Ken McCarthy, Chief Economist(212) 698 [email protected]
The market terms and denitions in this report are based on NAIOP standards. No warranty or representation, express
or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to
errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions
imposed by our principals.
SOURCE: U.S. Bureau of Labor Statistics
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T h o u s a n d s o f P e r s o n s
NEW YORK CITY FINANCIAL SERVICES EMPLOYMENT