Has New York City cars

New York City - the engine of the American economy stutters

The New York City metropolitan area is only slowly opening up. This contradicts the monetary policy-induced boom on the stock market. Typically, the metropolitan area contributes around 10 percent to American economic output.

First the lockdown due to the corona pandemic, then the night curfews due to rioting in connection with the protests against police violence - and now New York City is finally looking forward to a slow return to normal. It's summer, sunshine, and when walking through the streets you can feel with every fiber that people are finally enjoying life again, wanting to go out and consume again.

Normality is a long time coming

However, this is easier said than done. Because the return to normal is only progressing slowly. The metropolitan area had to meet seven critical pandemic mitigation criteria before reopening could begin. In the first phase, up to 400,000 workers can return to construction sites, production facilities or retail outlets. Phase two, in which most shops, offices and hairdressing salons are allowed to resume operations while maintaining “social distance”, comes a little later.

New York City: continued slack in local traffic

The population avoids the subway

More and more shops are opening gradually. However, only if they have economically survived the financial hardships of the past few weeks and the most recent looting. Suddenly “for rent signs” appear in front of individual shops. Entertainment companies, hairdressing salons and most hotels are still closed anyway, while restaurateurs can at least offer their products “to go”. When the weather is nice, the rush is sometimes considerable.

Public transport unpopular

Despite everything, many New York City consumers remain cautious and obviously do not want to get infected with the coronavirus. With all their greed for “pure joie de vivre”, they do not simply return to old habits. Many of them now use their vehicles or newly acquired bicycles intensively, and they walk more often. In contrast, it is different with local public transport. If you believe the mobility data as determined by Apple, public transport is currently rather unpopular. Their use has therefore hardly increased at a low level in the past few days.

Hotel nights sold

in New York City (millions)

It's bitter for the city. Since the operation of the facilities with around 70,000 employees is expensive and the sale of tickets does not even cover wages and ancillary costs, the city usually has to subsidize it with 7 to 8 billion dollars. This year the deficit will be significantly higher. The city itself has to bear similar burdens resulting from sharply declining taxes and high special expenses in connection with overcoming the Corona crisis.

The New York City metropolitan area plays a key role in the American economy as a whole. In recent years it has made a significant contribution to the growth of the entire country, after all, around 10% of the gross domestic product (GDP) is created in this metropolitan area. Nominal GDP last year was around $ 1,800 billion. Taken alone, the greater New York City area, with its 20 million people, was one of the ten largest “economic powers” ​​in the world. He is more efficient than Canada, Russia, South Korea, Australia or Spain.

New York City is a major contributor to American economic performance

Gross domestic product in bio. $

New York City is not known as the “financial capital of the world” for nothing. The industry was the largest contributor to the region's GDP in 2018, at nearly $ 500 billion. If one believes in optimistic forecasts, the financial sector will have recovered from the current upheavals in five years. The good news is that until recently, the New York economy was more diversified than it was before the last crisis. The service, information, education and health sectors have seen a boom since then. At the same time, jobs in the leisure and hospitality industry as well as in construction and other service sectors have increased significantly over the past ten years.

Not a bright spot in the important tourism sector

However, this development was rather a disadvantage in the Corona crisis, as almost all entertainment, hotel and restaurant businesses were closed. In this context, a particularly large number of black and Latin American Americans have lost their jobs. 70% of New York's Latin American population registered unemployed in the past few weeks - more than the rest of the country. The number of hours worked in New York City has declined more sharply than in other metropolitan areas.

Tourism and the jobs associated with it were and are decisive for the region's economic prosperity. As part of the pandemic, travel has collapsed across the board, also due to the entry bans. In March and April, the hotels were only occupied a third or less than is usual at this time of the year. The volume of traffic at the airports in the region halved in March alone, and it was certainly even lower in April and May due to the lockdown.

Investors on the booming stock exchanges, with sharply rising prices for shares in cruise lines, airlines, aircraft manufacturers and hotel groups, may bet on a rapid recovery in the American economy - given the hesitant opening of the New York area, they seem to be fairly early on.

New York's economy is pretty pessimistic

Empire State Manufacturing Survey