New York Economic Outlook Presented by: Marisa Di Natale, Senior Economist May 23, 2007
Chart 1: Northeast States Payroll Employment One-year vs. 3-month performance (3-mo. MA) Improving 2.0 Northeast States September March 2007 2006 Expanding U.S. 1.5 Rhode Island New Hampshire Annualized 3-mo. % change 1.0 Pennsylvania Connecticut 0.5 New York Massachusetts 0.0-0.5 0.0 0.5 1.0 1.5 2.0 New Jersey -0.5-1.0 Maine Vermont Contracting -1.5 % change year ago Slipping NOTE: Size reflects relative total employment
Chart 2: Northeast Metro Areas Payroll Employment One-year vs. 3-month performance (3-mo. MA) Improving 4.0 Northeast MSAs September March 2007 2006 Expanding 3.5 3.0 Annualized 3-mo. % change 2.5 2.0 New York 1.5 U.S. Philadelphia Pittsburgh Rochester 1.0 Albany 0.5 Newark Boston Nassau Baltimore 0.0-0.5 0.0 0.5 1.0 1.5 2.0-0.5 Washington Syracuse -1.0 Edison Buffalo Contracting -1.5 % change year ago Slipping NOTE: Size reflects relative total employment
New York's Expansion Is Slow and Steady Composite Index of Coincident Indicators, Jan. 2001 = 100 106 U.S. 104 102 100 98 New York 96 94 Source: Moody's Economy.com 01 02 03 04 05 06 07 4
Strong Global Demand... Total trade volume, % change year ago of 3 mo. MA 20 15 10 New York City Customs District 5 0-5 Buffalo Customs District -10 05 06 07 5
...Will Boost New York's Manufacturers 3 mo. MA 40 30 20 Empire State Manufacturing Survey (L) 70 65 60 10 55 0-10 ISM Manufacturing Survey (R) 50 45-20 03 04 05 06 07 40 6
Outside of the Factories, Upstate Is Hiring Upstate employment, % change year ago of 3 mo. MA 2 1 Non-manufacturing 0-1 -2-3 Manufacturing -4-5 -6-7 03 04 05 06 07 7
More Homogeneous Growth Upstate Private sector employment, % change year ago 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5 Syracuse Rochester Albany Buffalo -2.0 03 04 05 06 07 8
Population Growth Grinds to a Halt... 2006 population growth, BOC midyear estimates U.S. = 1.0% New York = 0% -.64 to -.17 -.17 to.23.23 to.68 9
Trends Have Been Deteriorating Nearly Everywhere Population, average annual % change U.S. Albany New York City 95-05 00-05 06 Syracuse Rochester Nassau-Suffolk Buffalo -0.8-0.4 0.0 0.4 0.8 1.2
New York Population Forecast 19.5 19.4 19.3 19.2 19.1 19.0 18.9 18.8 18.7 18.6 18.5 Population, mil (L) % change year ago (R) 00 04 08 12 16 20 24 28 32 36 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0-0.1-0.2 11
Less Direct Risk from Housing's Downturn... Housing-related employment, % change since Jan. 2003 Rochester Elmira Binghamton Buffalo Utica Albany Syracuse Nassau-Suffolk New York City Ithaca Poughkeepsie U.S. Kingston Glens Falls -5 0 5 10 15 20 25 30 35 40
...But Big Price Declines Pose Risks of Their Own Median existing single-family price, % change from peak Elmira Kingston New York City Ithaca Binghamton Buffalo Poughkeepsie Utica Rochester Syracuse U.S. Nassau-Suffolk Glens Falls Albany -14-12 -10-8 -6-4 -2 0
More Risky Borrowers in New York Than Anywhere Subprime mortgage originations as % of total, 2005 Nassau- Glens Falls Kingston New York City Poughkeepsie Albany U.S. Utica Syracuse Elmira Binghamton Rochester Buffalo Ithaca Source: HMDA 0 5 10 15 20 25 30
Having Trouble Keeping Up with the Payments First mortgage delinquency rate, % of $ volume, 2007Q1 Syracuse Utica Poughkeepsie Binghamton Buffalo Rochester Nassau-Suffolk U.S. Albany Source: CreditForecast.com New York City 1.0 1.5 2.0 2.5 3.0
No Signs of Slowing Yet in New York City 4 3 2 1 0-1 -2-3 -4-5 Office-using employment, % change year ago of 3 mo. MA (L) Unemployment rate (R) 03 04 05 06 07 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 16
Little Space Left in Manhattan as a Result Office vacancy rate, % 16 14 12 10 8 6 4 2 Source: CBRE Downtown Manhattan Midtown Manhattan 0 01 02 03 04 05 06 07 17
Wall Street Enters 2007 on Strong Footing... 9 8 Source: SIA 1,600 1,500 7 6 5 4 3 2 1 0 S&P 500 index (R) Securities industry net income, $ bil (L) 00 01 02 03 04 05 06 07 1,400 1,300 1,200 1,100 1,000 900 800 700 18
...But Risks to the Outlook Abound 84.0 83.5 Sources: Moody's Economy.com, Smith Travel Research Tourism/entertainment services employment % change year ago (R) 4.0 3.5 3.0 83.0 2.5 82.5 2.0 1.5 82.0 1.0 81.5 81.0 Hotel occupancy rate (L) 05 06 07 0.5 0.0-0.5 19
Is a Large Oversupply Looming in New York City? 40 35 30 25 20 15 Sources: CSW, BOC, Moody's Economy.com Multifamily permits, ths. 10 5 0 CSW condo price index, % change year ago 03 04 05 06 07 20
Goods-Producing Sector Will Drag Growth Employment, avg. year-to-year % change, 2006Q4 to 2008Q4 Educ./healthcare Information Leisure/hospitality Other services Prof./bus. services Finance Retail trade Nat. resources/mining Government Wholesale trade Transport./utilities Construction Manufacturing Source: Moody's Economy.com -1.5-1.0-0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 21
Much of Upstate Will Do Better in the Near Term Employment, average annualized % change Ithaca Kingston U.S. Poughkeepsie Glens Falls Albany New York New York City Nassau-Suffolk Syracuse Utica Binghamton Elmira Buffalo Rochester Source: Moody's Economy.com forecast Two years ending in: 2008q4 2006q4-0.5 0.0 0.5 1.0 1.5 2.0 22