Long Island’s economy will grow more slowly than the nation’s this year as the region continues to shift from manufacturing to service businesses, a panel of experts said Tuesday.
The local economy will expand about 1 percent in 2016, according to Thomas Conoscenti, an independent economist based in Coram. He also predicted a similar rate of growth for next year.
“The economy is not bouncing back the way we want it to be” from the 2007-09 recession, he said at a forecasting event organized by Farmingdale State College. “The outlook isn’t bad, but it’s not great. We will be dribbling along with no big changes in economic activity.”
Other economists at the event said they didn’t disagree with Conoscenti’s assessment.
The projected growth rate of 1 percent is sharply lower than previous forecasts by John A. Rizzo, chief economist for the Long Island Association business group, and Richard Vogel, dean of Farmingdale State’s business school. In interviews last month both said the economy of Nassau and Suffolk counties would expand 2 percent to 2.5 percent in 2016, slightly faster than last year’s rate.
Vogel moderated Tuesday’s panel discussion, which included Conoscenti, a veteran observer of local business activity, and three other economists.
The U.S. economy is projected to grow 2 percent to 2.3 percent, said Robert Kurtter, former U.S. public finance director at Moody’s Investors Service and finance chief for former Suffolk County Executive Patrick Halpin. “Long Island is underperforming the United States if [Conoscenti’s] forecast is correct,” Kurtter said.
“But I would prefer to see slow, steady growth than the speculative booms and busts that we saw first with the technology bubble and then the housing bubble,” which sparked the last recession, he said.
The economists disagreed on the size of the Island’s economy, saying the value of all goods and services produced here range from $170 billion to $230 billion.
The growth of low-paying jobs and a lack of affordable housing were among the issues that the economists said would impact the Island’s growth.
Robert Lipp, director of the Suffolk County Office of Legislative Budget Review, said there has been a substantial narrowing of the gap between local incomes and the national average, with wage earners elsewhere catching up to us. That’s a problem because the cost of living is so much higher in Nassau and Suffolk.
“We are observing a decrease in average wages for business establishments on Long Island . . . to about $53,000 per year, which is close to the national average,” he said.
Lipp also said affordable apartments for young workers continue to be in short supply because of the historical preference in the suburbs for single-family homes. He said developments such as the Ronkonkoma Hub, Wyandanch Rising and others near Long Island Rail Road stations are meant to address this need.
Farmingdale State economist Abeba Mussa said, “We talk about the brain drain on Long Island and attracting young skilled professionals — that’s connected to the high cost of housing. . . . Actions should be taken at all levels to create new homes.”