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New York region's GDP up only 1.4% in 2012

Weakness in the financial services sector was cited

Weakness in the financial services sector was cited by the state comptroller as a reason for the metropolitan area’s sluggish growth. Another expert cited the impact of superstorm Sandy. Photo Credit: Getty Images

The New York region's economy grew far slower than the national average for metropolitan areas last year because of superstorm Sandy and a resurgence in manufacturing elsewhere wasn't duplicated locally, experts said Monday.

The federal Bureau of Economic Analysis reported recently the gross domestic product for the New York region rose 1.4 percent in 2012 to $1.17 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.

Nationally, GDP among cities was up an average of 2.5 percent in 2012.

"The New York region had been doing better than the rest of the country through the recession and much of its aftermath," said Christopher Jones, research vice president at the Manhattan-based Regional Plan Association. After the 18-month recession ended in 2009, he said, local GDP climbed 3.6 percent, compared with 2.4 percent nationally.

But he said the New York region now lags because the housing market wasn't devastated during the financial crisis like it was in some other areas, and therefore isn't benefiting from the recovery as much.

Jones also said the New York region's economy was impacted by Sandy, which struck on Oct. 29. "You have to look at this as a potential cause, because businesses and homes throughout lower Manhattan, Long Island and northern New Jersey were affected. Each is an important component of the GDP number," he said.

The economic analysis bureau doesn't break out GDP for Long Island. However, economic forecaster IHS Global Insight has estimated Nassau-Suffolk accounts for about $122 billion of regional GDP.

New York is the country's biggest metro area by population but ranked ninth among the 10 largest in terms of economic growth last year. San Francisco was No. 1, with GDP growth of 7.4 percent.

State Comptroller Thomas DiNapoli blamed the New York region's sluggish growth on "continuing weakness in the financial services sector, combined with strong manufacturing growth in other parts of the country."

However, he and New York City economic development officials noted the city and some of its suburbs have added more jobs than were lost in the recession, which still isn't the case for the United States as a whole.

Much of the 2012 growth locally came from information industries such as publishing, computer software, television and movie production, telecommunications and data processing. Two sectors shrank: transportation/utilities and education and health services.

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