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Island economy should accelerate in second half, economist, banker say

Duncan Swezey, managing director at TD Securities, addresses

Duncan Swezey, managing director at TD Securities, addresses local business executives on June 17, 2015, at Jewel Restaurant in Melville. Credit: Barry Sloan

Long Island's economy will accelerate in the second half of this year, a local economist and a banker predicted Wednesday.

April's unemployment rate was at a seven-year low of 4.4 percent, construction companies and retailers have been hiring hundreds more people than usual, and home prices have risen strongly, according to state and private-sector data.

Consumers also are feeling better about their immediate economic future, and with the summer tourism season in full swing, consumer spending will increase. Such expenditures account for about 70 percent of all economic activity in Nassau and Suffolk counties.

"The last half of the year we're going to see something better than what we have seen so far," said John A. Rizzo, chief economist for the Long Island Association, the region's largest business group, and a Stony Brook University professor. Increases in consumer confidence, home sales and home prices, and an improving job market, he said, "all point to higher growth in the second half."

However, he said it was too early to predict if the Island's gross domestic product -- the sum of all goods and services produced here -- would grow faster than 2014's rate of about 2.5 percent.

Rizzo presented his upbeat forecast to about 80 business people Wednesday at Jewel Restaurant in Melville. The event was organized by the LIA and TD Bank.

After the formal program, Edward J. Blaskey, president of TD Bank's suburban New York operations, said local consumers and businesses are beginning to shake off the caution fostered by the recession. "We're seeing a little more assertiveness" by people seeking mortgages, credit lines and business loans, he said.

Blaskey also said demand for TD Bank's services is stronger on Long Island than in New York City's northern suburbs. "Long Island is vibrant . . . I think the economy is heading in the right direction," he said.

Some in the audience Wednesday asked Rizzo and Duncan Swezey, a TD Bank managing director, about when the Federal Reserve System would raise interest rates.

Swezey, who has followed interest rates for decades, said the Fed must weigh competing issues such as the debt crisis in Greece, oil prices, the strong U.S. dollar and Wall Street's reaction to a rate hike.

"Nobody knows what's going to happen," he said. "Based on the [U.S.] economic numbers, rates should be moving up steadily. But you still have the overseas issues, you still have the Greece issue, you have oil, you have the dollar. The Fed has to consider all of these before it acts."

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