New York's Economy: The 6 Industries Driving GDP Growth

The state of New York has the third-largest economy in the United States with a gross domestic product (GDP) of $1.7 trillion, trailing only Texas and California. New York's economy is so large, it would rank as the twelfth largest economy in the world if it were its own country.

Its signature metropolitan center, New York City, is the single largest regional urban economy in the country. New York City is the leading job hub for banking, finance, and communication in the U.S. New York is also a major manufacturing center and shipping port, and it has a thriving technological sector.

The leading industries in New York are not just driving the state's economy; they are big drivers on a national and global scale.

1. Financial Services

The financial services sector is synonymous with Wall Street, which is located in Manhattan. The New York Stock Exchange (NYSE), founded in 1817, is likely the most influential securities exchange in the world. This sector does not lead New York in terms of total employees (that would be educational and health services) but it does by GDP, generating $429 billion for the state. The financial services sector is clearly one of the most influential industries in the state.

Financial services are highly concentrated in New York City. All told, there are more than 330,000 financial services workers in New York.

2. Healthcare

New York is home to nearly 20 million people as of July 2019 (latest information), which means there is a lot of demand for healthcare services. The New York Department of Labor indicates there are more employees in the "Education and Health Services" industry than any other.

Unlike financial services, however, the average salary for healthcare jobs in New York falls below state averages, which is approximately $95,000 per year as of September 2021, whereas for a healthcare worker the average salary is $69,861.

The educational services, healthcare, and social assistance industry contributed $135 billion to the state's GDP in 2020.

3. Professional and Business Services

As of August 2021, there were an estimated 1.3 million New Yorkers working in professional and business services. This broad field includes a great number of different professional groups, such as lawyers, accountants, mechanics, and marketers, who share similar characteristics.

These are the professionals who make daily life possible for individuals and businesses, and who work primarily in supplemental roles to other, more notable sectors. For this reason, this group of professions is highly sensitive to economic cycles; unlike financial services, which leads economic trends in many cases, professional and technical services are beholden to the success of other industries.

Professional and business services contributed $195 billion to New York's GDP in 2020.

4. Retail Trade

Retail trade also includes a large number of subindustries, such as food and beverage, clothing retailers, electronics retailers, auto retailers, and everything else that comes to mind when invoking images of Fifth Avenue. As in finance and manufacturing, New York retailers and their marketing advisers are major trendsetters in the national industry.

According to the Retail Council of New York State, there are more than 941,000 workers in more than 77,000 New York retail businesses. Many of these jobs are spread throughout the greater New York City area.

This is another cyclical industry that tends to be very hard hit during economic recessions, though some defensive industries, such as food, do not necessarily see the same fluctuations. Like professional services, retail trade is often a trailing sector and is usually a byproduct rather than a cause of a healthy New York economy.

The retail trade industry contributed $64.5 billion to New York's GDP in 2020.

5. Manufacturing

New York exports a wide variety of manufactured goods to other states and foreign countries. The manufacturing sector is a leader in railroad rolling stock, as many of the earliest railroads were financed or founded in New York; garments, as New York City is the fashion capital of the U.S.; elevator parts; glass; and many other products.

As many cheaper and lower-paying manufacturing jobs continue to relocate overseas, New York has seen a corresponding rise in technical manufacturing. This includes computer products, mobile devices, video games, 3-D printing, and general software engineering tools. These jobs tend to pay well above the average state wage.

The great manufacturing hub of New York is located just east of Newark and Staten Island in what locals refer to as the Five Boroughs. After more than a decade of bleeding jobs away from New York's high-tax and high-cost environment, an entrepreneurial boom led to net gains in manufacturing in 2014.

The industry contributed $61 billion to New York's GDP in 2020.

6. Educational Services

Though not typically thought of as a leading industry, the educational sector in New York nonetheless has a substantial impact on the state and its residents, and in attracting new talent that eventually enters the New York business scene. As discussed above, it is usually grouped with the healthcare services industry.

There are hundreds of thousands of teachers, teachers' assistants, professors, tutors, childcare workers, educational agencies, and other education sector employees in the state. Many of them are public employees, as the government is the largest employer in the state, though there is also a healthy private education market.

New York has seen a large uptick in college attendees, both young and old, over the 21st century, and an increasing number of new employees in other New York sectors were educated in the state. As part of the healthcare and social services sector, this industry contributed $135 billion to New York's GDP in 2020.