Q2 2012 Long Island, New York Commercial Real Estate Economy

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Q2 2012 Long Island, New York Commercial Real Estate Economy

As Long Island moves past the mid-point of 2012, its recovery from the economic slowdown that has persisted across the nation is still tentative. In their September 2012 Factbook report, the Long Island Association (LIA) states that “Long Island is recovering from one of the most damaging economic recessions of the post-World War II period. Nassau and Suffolk Counties lost more than 38,000 payroll jobs during the recession and have since regained only about half these jobs. Moreover, job growth has been uneven, varying from month-to-month. The recent pattern of local job growth suggests that the current job market is structurally different from that of the recent past. It is being ‘hollowed out’ in the sense that job creation is occurring at the top and bottom ends of the wage scale. Relatively few mid-wage jobs are being generated.”

This observation is borne out by other sources. “Long Island recovery slow; 6,300 jobs added,” ran the headline on a July 19th story in Long Island Business News. “Long Island as of June grew its jobs in the region by less than 1% compared to a year ago in a sign of a slow, but continuing recovery.” Reporting on figures released by the New York State Department of Labor, this source stated that “total Long Island jobs in June grew by 0.5% for the year, adding 6,300 jobs to reach 1.275 million. The private sector grew by 0.6%, or 6,800 jobs, to 1,064 million, well below the state’s 1.9% increase and the nation’s 1.8% rate,” this source reported. According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm employment increased by 9,100 (0.7%) from July 2011 to July 2012. This represents a fall in employment from the 14,000 non-farm jobs gained from July 2010 to July 2011. Thus, the total job picture for Long Island is still mixed. Household-based data from the BLS report an increase in the number of employed residents of Nassau and Suffolk Counties, including the self employed and commuters to New York City to the west, by just 3,850 in the 12 months ending in July 2012. That is even slower than the increase in the number of people working in Nassau-Suffolk, and much slower than the increase in the labor force.

Long Island still has a way to go. “The recent recession was different from most prior recessions in that many of the jobs that were lost will not be coming back. This is particularly true of jobs lost in consumer-related industries and in housing,” according to the LIA report. According to CES data, employment in Construction and related industries fell by 4,800 jobs (7.5%) in the 12 months ending in July. Transportation and Utilities suffered a smaller loss of 300 jobs (0.9%). Manufacturing, another trouble spot, posted a loss of 500 jobs (0.7%). Long Island Business News, quoting an analyst from the state labor department, reported “labor market conditions have been weakening somewhat in the region with sub-1% year-over-year growth in the private sector over the last three months.” The goods-producing sector in the region continued to be a drag on the economy, state labor officials report. Retail Trade lost 1,200 jobs (0.8%) through July, although Wholesale Trade increased by a modest 800 (1.2%). Gains in the “white collar” sectors were more substantial. Financial Activities employment increased by 4,800 jobs (6.8%), a hefty gain, and Professional and Business Services employment grew by 7,000 jobs (4.3%). The substantially government-funded Education and Health Services sector saw employment increase by 6,400 (2.9%).