Growth falters in “New NY”

by E.J. McMahon |  | NY Torch

screen-shot-2014-05-16-at-11024-pmEconomic growth in New York State slowed down significantly in 2013, ranking 46th out of 50 states as measured by the federal government’s latest real Gross Domestic Product (GDP) data.

The inflation-adjusted total value of goods and services produced in New York was up just 0.7 percent last year — less than half the national real GDP growth rate of 1.8 percent. The preliminary GDP number for 2013 is consistent with New York’s statewide job-creation numbers, which also have been well behind the national pace.

As shown in the following chart, New York was also below but closer to the national GDP growth rate in 2011 and 2012, after growing faster than average in 2010.

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From state government’s revenue-centric standpoint, the most troubling indicator in the latest state GDP numbers was a decrease in output in New York’s finance and insurance sector, which pulled down overall economic growth by 0.13 percent. Nationally, by contrast, finance and insurance added 0.14 percent to real GDP last year. Durable goods manufacturing output in New York also declined slightly, even while increasing slightly in the nation as a whole.

On the positive side, the GDP numbers indicated stronger-than-average growth in New York’s information and professional and business services sectors. The government-subsidized health care and social services sector also grew more quickly than the national average.

P.S. — New York’s 2013 real GDP growth rate was the lowest since the recession year of 2008. And New York’s share of total U.S. GDP fell to 7.8 percent in 2013; it was 8.1 percent in 2010.

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.