NY economy lags across state despite signs of recovery. What's happening in your region

Mario Marroquin
New York State Team

While the service sector in the New York metropolitan area began showing positive signs for the first time in 13 months in April, the regional unemployment rate continues to challenge communities across the Empire State.

The state Department of Labor reported this week that the unemployment rate across all but three regions in the state remains at or above the national average of 6%.

Meanwhile, New York City's current unemployment rate of 11.2% is nearly thrice the unemployment rate of the city in March 2020 at the onset of the pandemic, when it was a mere 4.2%.

Government-mandated restrictions across New York and a change in consumer habits doubled the unemployment rate in the state's metro areas from 4.3% in March 2020 to 8.6% last month.

However, the long-term effect of the pandemic is likely to unfold unevenly across the state.

Some recent findings from the state Department of Labor: 

  • Albany, Columbia, Dutchess, Livingston, Nassau, Ontario, Putnam, Rensselaer, Rockland, Saratoga, Tompkins and Yates counties recorded an unemployment rate below that of the national average (6.0%).
  •  The county with the lowest unemployment rate in the state was Tompkins County, home to Ithaca at 4.7%; the county/borough with the highest unemployment rate in the state was the Bronx (15.3%).
  • The Watertown-Fort Drum metro area was the only metro area in the state that saw a slight decrease in unemployment rate from March 2020 (7.5%) to March 2021 (7.1%).

Turning the corner

FILE - This photo from Friday Feb. 26, 2021, shows three new residential skyscrapers towering over the skyline of Central Park South, in New York. New York state lawmakers hope to vote for a tax increase on wealthy individuals, to bring in at least $3 billion and prevent the need for spending cuts in years to come.

Despite the adverse effect government-mandated restrictions have had on the economy over the last 13 months, both the state Department of Labor and the Federal Reserve Bank of New York say the regional economy has begun to show signs of a recovery. 

New York added 61,200 private sector jobs in March, with the bulk of the new jobs coming from the leisure and hospitality industry, education and health services, professional and business services and the construction industry, state data showed.

"About half of service sector firms said their revenues were currently at or above normal levels, as did two-thirds of manufacturers," Jason Bram and Richard Deitz of the New York Fed said. "All in all, regional firms expressed widespread optimism that conditions would improve in the months ahead."

The regional bank reported the manufacturing sector saw significant increases in production costs and selling prices. And it said the majority of surveyed firms expect revenues to increase from current levels if business conditions were to return to normal.

"When asked what factors might restrain their ability to meet demand if it rebounded, the constraints most widely cited by service firms were the ability to procure adequate staff, as well as residual COVID-related restrictions and regulations more generally," Bram and Deitz reported.

On the other hand, state Comptroller Thomas DiNapoli said tax collections for the state fiscal year in New York were $3 billion more than forecasted by the state's financial plan and $6.8 billion more than initially forecasted in May.

Total collections still came in $513.3 million shy of taxes collected in the previous fiscal year. 

"Better-than-anticipated tax collections, federal resources and new revenues in the recently adopted budget allow for important investments in critical programs and services, but state policymakers must ensure that spending commitments are in line with recurring revenue sources,” DiNapoli said.

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Mario Marroquin covers real estate and economic development. Click here to see his latest stories. He can be reached at mmarroquin@gannett.com or @mars3vega