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New York regional economy grew 1.3% in 2017, report states

A view of midtown Manhattan on Sept. 8,

A view of midtown Manhattan on Sept. 8, 2016. Financial services/real estate and trade helped the metro region, including Long Island, grow 1.3 percent in 2017. Credit: Getty Images / Drew Angerer

The New York region’s economy grew faster last year than in 2016 but slower than in 2014-15.

The federal Bureau of Economic Analysis reported recently the gross domestic product for the New York region rose 1.3 percent in 2017 to $1.44 trillion compared with a year earlier.

The GDP figure represents the value of all goods and services produced in the 25-county area that includes Long Island, New York City and northern New Jersey.

The region’s GDP climbed 0.4 percent in 2016, 2 percent in 2015 and 1.8 percent in 2014.

Nationally, GDP among cities was up an average of 2.1 percent last year.

"It's decent, but it could be better," said Christopher Jones, senior vice president and chief planner at the Manhattan-based Regional Plan Association, referring to the New York region's economic growth last year compared with the national rate.

"In the early part of the recovery from the recession [after 2009], New York City and Long Island actually did better than the country as a whole" in part because federal money was injected into Wall Street, the city's economy was robust and the housing crisis hit other regions far worse, he said Monday. "What you are seeing now is this region has leveled off and other parts of the country are now growing faster."

The question now, Jones said, is "Are Long Island, New York City and other parts of our region going to be able to keep up with the national economy?"

He also said the uptick in regional GDP was partially due to lower business tax rates that went into effect in December as part of the federal Tax Cuts and Jobs Act of 2017, though he cautioned that a cap on tax deductions on residents' federal income tax returns could undermine economic growth this year and next year.

Also Monday, John A. Rizzo, chief economist for the Long Island Association business group and a Stony Brook University professor, said "We are doing better than 2016, but earlier in the [economic] recovery we were growing faster, which suggests the recovery may be decelerating" in the New York region.

The economic analysis bureau doesn’t break out GDP for Long Island. However, economic forecaster IHS Global Insight has estimated Nassau and Suffolk counties account for about $170 billion of area GDP.

Much of the region’s economic growth in 2017 came from financial services/real estate and trade.

Four sectors shrank: government, construction, non-durable goods manufacturing and information.

Economists said the growth of financial services was likely powered by stock market gains, which could be reversed if the Federal Reserve continues to raise interest rates. Continued growth in health care and tourism, including restaurants, hotels and entertainment, is part of a long-term shift in the region's economic drivers.

"They have been growth sectors for some time," Jones said.

WHERE THE GROWTH WAS IN 2017

The New York region's gross domestic product, a measure of economic activity, rose 1.3 percent last year.

Sectors that grew:

Finance/insurance/real estate

Trade

Education/health care/social services

Arts/hospitality/recreation/entertainment

Durable goods manufacturing

Other services excluding government 

Sectors that shrank:

Government

Construction

Non-durable goods manufacturing

Information
SOURCE: U.S. Bureau of Economic Analysis

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