The New York City Economy Tracker: March 27, 2023

Investopedia’s biweekly updates tracking the health of New York City’s economy

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The New York City Economy Tracker is a joint project between Investopedia and NY1, using publicly available data to evaluate the economic health of the city across a variety of metrics.

For the week of March 27, 2023, we’re looking at growth in business establishments across the city’s five boroughs, comparing current levels with each borough’s pre-pandemic baseline.

Business Establishments Up Citywide, Especially in Brooklyn

The number of business establishments in New York City, defined by the Census Bureau as a single physical location where business is conducted, such as a store or office, increased 2.2% between the third quarter of 2019 and the same quarter of 2022, according to data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages. Every borough except for Manhattan has more physical businesses today than before the pandemic.

Growth in new establishments was most pronounced in Brooklyn, which saw an 8% increase in storefronts. Brooklyn was also the only borough where the number of establishments did not dip below 2019 levels early in the pandemic. Queens, Staten Island, and the Bronx saw more modest gains between 3% and 4%, but still exceeded the citywide growth rate.

Conversely, Manhattan, which typically accounts for just under half of all businesses citywide, had a 1.7% decline in the number of establishments and is the only borough with fewer businesses now than before the pandemic.

Real Estate and the Tech Sector Drive Business Growth

A closer look at the data reveals that a handful of industries, classified according to NAICS, led growth in each of the major boroughs. Real estate was the primary driver of growth in the Bronx, Queens and Staten Island, while the tech sector drove gains in Brooklyn. While business growth in Manhattan was negative overall, the borough recorded a sharp increase in office administrative positions—a bright spot in the borough’s struggling business landscape.

In the Bronx, Queens, and Staten Island, real estate was the primary driver of growth on account of booming housing demand during the pandemic. Residential building construction, services to buildings and dwellings, and real estate agencies and brokerages were some of the fastest-growing subsectors in these boroughs. Growth in residential building construction was most pronounced in the Bronx, where it grew 25% between the third quarters of 2019 and 2022. It was the second fastest-growing sector in Staten Island, where it grew 8.9%, and the third-fastest in Queens, where it rose 10.2%.

By contrast, business growth in Brooklyn, which recorded the most impressive gains overall, was more concentrated among technical industries. Two sectors with particularly large gains in the borough were management, scientific, and technical consulting services, and computer systems design. Jobs in these industries tend to pay substantially more than the national average, with employees in the former earning $47.62 an hour, on average, while those in the latter earn $56.17. This compares to the national private sector average of $33.01.

Manhattan Sheds Establishments, Driven by Losses in Employment Services

Manhattan—the city’s core business center—is the only borough to have lost establishments between the third quarter of 2019 and the corresponding quarter of 2022, with the number of businesses down 1.7% over that period. Declines were driven by closures in the employment services industry, which covers recruitment, hiring, and worker placement. There are now 42% fewer establishments in the employment services industry in Manhattan than before the pandemic.

Not all was negative for the borough’s business landscape. The number of establishments in Manhattan’s office administrative services industry soared by 80% over the past three years—the largest increase among any borough.

Article Sources
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  1. U.S. Bureau of Labor Statistics. "Quarterly Census of Employment and Wages."

  2. U.S. Bureau of Labor Statistics. "Current Employment Statistics: Employment and Earnings Table."

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