Regional GDP fell 4 percent from 2009
Federal economists Wednesday put a number on how bad the recession was on Long Island and throughout the metropolitan New York area.
The U.S. Bureau of Economic Analysis said the region's gross domestic product fell 4 percent in 2009 to $1.09 trillion compared with a year earlier. GDP represents the value of all goods and services produced in the 23-county area that includes Nassau and Suffolk counties, New York City and portions of northern New Jersey and Pennsylvania.
The bureau doesn't break out GDP for Long Island. However, the U.S. Conference of Mayors estimates Nassau and Suffolk account for $137.6 billion of the regional GDP number, according to Pearl Kamer, chief economist at the Long Island Association, a Melville-based business group.
The GDP decline in 2009 followed a 0.4 percent dip in 2008 and a 0.7 percent decline in 2002. The strongest growth of recent years came in 2005 and 2006, which saw GDP increases of more than 4 percent.
The 4 percent drop in 2009 was due to less activity in financial services - which includes banking, real estate and Wall Street - which fell by 1.4 percentage points compared with 2008, and construction and tourism. Small year-over-year gains were seen in trade and government.
"We didn't do as badly as we could have, mostly because the metro region is heavily engaged in global trade, even on Long Island," Kamer said. "But we did get hurt because the recession was centered in finance and housing - and it was a very deep recession, unlike any we've seen since World War II."
Kamer and others predicted another drop in GDP occurred last year, though it was probably less severe than in 2009. The bureau is expected to release 2010 figures in September.
"The economy bottomed out in 2010, but I don't really believe it turned around. You have such high unemployment," Kamer added.
Inflation was removed from the GDP figures. If it was included, bureau analyst Sharon Panek said, the New York region's 2009 GDP would be $1.21 trillion, down from $1.24 trillion a year earlier.
The region also fared better than many populated areas throughout the country.
Metropolitan New York ranked 243 out of the 366 areas studied. Nearly 300 reported GDP declines in 2009, with the hardest hit being Kokomo, Ind., which suffered a 20 percent drop from 2008 as factories closed or reduced production. The fastest growth, 22.4 percent, was in Casper, Wyo., where mining activity surged.
Economists said Long Island wasn't able to ride out the 2007-09 recession, as it did previous downturns, because key industries such as real estate, construction and financial services were hammered.
"We generally suffer through these recessions better than the rest of the country," said Edward Gullason, an economics professor at Dowling College in Oakdale who once worked for the White House's Council of Economic Advisors under former President Ronald Reagan. "But things are different in this case because of how wedded we are to the financial services industry, which was pummeled."
The New York region's gross domestic product, the value of all goods and services produced, fell 4 percent in 2009 to $1.09 trillion compared with a year earlier. It was the third decline since 2002.
GDP (without inflation)
Percentage change from previous year
2009: $1.09 trillion; -4 percent
2008: $1.14 trillion; -0.4 percent
2007: $1.14 trillion; 2.1 percent
Of the 4 percent decline in 2009, here are how some business sectors performed:
Construction: -0.3 percentage points
Financial services: -1.4 percentage points
Leisure and hospitality: -0.3 percentage points
Government: 0.03 percentage points
Note: The New York Region consists of 23 counties including Long Island, New York City and portions of New Jersey and Pennsylvania.
Source: U.S. Bureau of Economic Analysis