NYC-WTC_000195490

NYC 9/11 Public Portal Document

of about 5,000 jobs per year. The losses in manufacturing will subside somewhat to about 5,000 jobs lost per year, leaving only a select base of manufacturing jobs in the the City. In summary, private sector employment grows approximately 42,000 jobs per year in 2003-2005, with government employment practically unchanged.!

The impact on the City’s economy of the slowdown in employment in 2001-2002 will be accentuated by a decline in wages in the lucrative FIRE sector. Revenues on Wall Street are forecast to decline in 2001 as the battered stock market has signalled an end to the lucrative dot-com IPO market arid trading commissions, which have so far held up in the first months of 2001, are also expected to slow. With New York Stock I Exchange member-firm profits expected to fall from a record $21 billion in 2.000.to $5.5 billion in 2001, normal year-end bonus payouts are forecast to drop more than 50 percent. Eventually, however, job cuts and lower interest rates should help firms reduce costs and as a result, profits should begin to rebound in 2002, rising to a respectable $10 billion, and holding essentially steady in the outyears. ; - '/ . ' > ' / I ! ' f /' Since the FIRE sector accounts for over 30 percent rif the earnings in the City (despite accounting for f only 13 percent of the employment), the drop in bonuses and the associate^ spending will have a ripple effect on the other sectors as well. Overall wage income, which grew by 11, percent in 2000, will slow to IFa bl percent growth in 2001-2002. The anticipated recover^ in Wall Street profits in 2002 will boost year-end bonuses, pushing wage income growth up to almost 5‘/2 percent per year in 2003-2005. Outsidp of the FIRE sector, private sector wage income which grew by 10 percent in 2000, will increase by 5’/2 percent per year throughj2005.; With inflation expected to remain tame in the 214-3 percent range, real wage rates grow at 1- 11/2 percent.

j While 2000 Was quite INVENTORY AND OFFICE EMPLOYMENT spectacular in nearly all aspects of In th« currant axpanclon, dasplte record amployment galna, naw Inventory the City’s economy, few benefited as build-up haa baan minimal. As a reaull, tha office markat will ranwln tight In 2001-2002 aven aa growth In office employment alowa. much aS Manhattan's commercial / 6 . .......................................... ..... —........ I I..—..... —.......... ... J

building owners. As overall vacancy 1 rates feH’belpw 4 percent in the City, __________ __ / ; 4; landlords ( in almost every IB neighborhood were able to. raise asking rents nearly 30 percent, an I’ \

I increase of roughly $13 per square foot in the primary market to over i $60 per square foot, and a $9 per ' square foot increase to $40 per lllli111 I square foot in the secondary market^. Although the impressive 1" _______ , -4 ffl NYC Primary /nventor)' ' employment growth of the past three " Office Employment (FIRE i Service Employment) years is expected to subside, the ■

I City's office market is expected to -6 I-------------------------------------- - I hold up well, unlike the downturn 87 89 91 93 95 97 99 01 03 05 of the early 1990s. First, the Note: 1995 data are adjustedfor a reclassification of office building^. Si forecast slowdown in employment is minor compared to the massive losses the City suffered in 1990-1993. Second, in contrast to the 1980si when over 40 million square feet of office inventory was added in the City, creating a severe over-supply, developers have been very cautious about building in this latest boom. In fact, since 1995 only 3 million F I 2. Office market data are compiled using statistics published by Cushman‘i& Wakefield.

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