As the home of the largest U.S. city, New York stands tall as an industry leader with the third highest GDP (almost $1.6 trillion) in the nation. The state was also ranked 4th in 2017 in new business growth, with small businesses representing approximately 99% of the two million companies in New York. In fact, almost 90% of the NY economy comes from privately owned businesses, and 98% of businesses in New York City alone have fewer than 100 employees. Compared to other cities, NYC has been experiencing the largest volume of new business formation in the state.
So how have industries in New York been faring in 2018? Swyft Filings cross-referenced in-depth research and proprietary data to determine which industries are driving the most growth in the state so far this year.
New York’s consulting industry overall is increasing at the strongest rate, even as manufacturing remains the top industry in the state. The privacy and lower tax benefits for LLCs have aided New York’s consistent rise in new business formations in multiple industries.
Both Brooklyn and Manhattan have seen their own share of new business growth, particularly in the consulting, retail, and construction industries. There is a strong correlation between the steady rise in Brooklyn’s labor market — up over 4% from last year — and the expansion of new businesses since 2017.
Here are the top industries driving growth in New York:
The consulting industry is expanding globally, valued at almost $250 billion in 2016 and reaping the positive effects of the global economic growth. In the United States, consulting netted more than $60 million in 2017, and is further expected to bring in at least $87 million annually by 2025. The speedy development in the digital technology field is creating more opportunities for the consulting industry and allowing businesses to flourish.
New York’s influence on the consulting industry is having a worldwide impact due to one of the top consulting firms, Deloitte Consulting, who recently posted a substantial revenue increase of 11% from the previous year. The total so far for 2018 is an astounding $43 billion.
New York’s retail industry has experienced changes in the past few years, particularly in New York City. Popularly known as one of the “Big Four” fashion capitals of the world, the city has seen a noticeable drop in the cost of commercial real estate space has led to an influx of foreign retail businesses from Asia, Europe, and South America. NYC is already home to the headquarters of several high-end fashion retailers like Bloomingdale’s, Calvin Klein, Kate Spade, Macy’s, and Tiffany & Co; however, with the average square foot price of prime space on Madison Avenue dropping several hundred dollars ($1,100 from $1,800 in 2016), foreign companies and newly formed companies are giving the retail industry in New York a much-needed boost.
The construction industry in New York has made impressive progress in the recent years — New York City’s construction workforce has expanded by over 30% since 2013 and wages have risen by over 9% since 2015. The positive increase is due, in part, to two main factors: labor shortages (down 1% from 2015 - 2016) and multiple new construction projects in the five boroughs.
One of the rising stars in New York’s booming economy is the entertainment industry. A recent report on the state’s Film Tax Credit Program shows that movies and TV shows have added more than 70,000 new jobs to New York in the past four years and bolstered the state’s revenue by over $12 billion, which is an increase from previous years by 22%. Even though NYC has a solid multi-billion dollar film industry that is pouring revenue into all five boroughs, Broadway is also showing a noticeable increase in sales. During the last year, Broadway shows have produced an astounding $1.7 billion in revenue. Musicals are certainly the heavyweight, contributing $1.44 billion of the total gross receipts.
The film industry in New York has recently branched out beyond Manhattan, to the other four boroughs — particularly in Brooklyn. In the past five years, the number of film permits issued for Brooklyn has jumped almost 5% while Manhattan has seen a 9% drop. Both Queens and the Bronx also experienced an increase in film permits.
5. Real Estate
Following a fourth-quarter slump at the end of last year, the real estate industry in New York is rebounding as a buyer’s market. New York, specifically New York City, is touted as a “safe haven” for real estate investment as sellers in both commercial and residential real estate-adjusted prices to capture the attention of anyone interested in snatching up prime property in Manhattan and other parts of the city — roughly 30% of the active listings across NYC have seen their asking prices dropped significantly.
The residential market is currently trending positively, having jumped a little over 5% at the end of the last quarter and is expected to climb another 6% over the next year. The commercial side of New York’s real estate industry is also slowly moving upwards, prompted by a leveling over prices and effect of the new tax plan’s lowering of corporate taxes.
New York’s technology industry is growing exponentially, contributing almost 300,000 jobs and nearly $125 billion in revenue. New York City is now considered the fastest growing hub for technology in the nation, with approximately 7,500 tech businesses residing in the city and making up 120,000 of the technology-based jobs in the state. Even giants like Amazon see the benefit of being in New York — the online business plans to open a new office in Manhattan, a $55 million project that will add another 2,000 jobs to the city.
7. Professional Services
The professional services industry is growing at a rapid rate, with over 5.5 million businesses around the world and bringing in twice as much revenue as the United States GDP. Advances in the technology industry have led to a disruption in the traditional business models of the professional services industry, allowing more opportunities for expansion. In New York, the professional services industry is a powerhouse that employs almost 650,000 people. New York City is home to four of the top professional services firms in the world: Deloitte, PWC, KPMG, and Nielson.
New York’s transportation industry is currently experiencing some upheaval in multiple areas. After years of complaints about heavy road congestion and competition against licensed cab drivers, NYC Mayor Bill de Blasio recently signed a new law that puts a hold on issuing new licenses to ride-share drivers for twelve months. The main reason behind the new law, according to the Taxi and Limousine Commission, is to weed out the excessive vehicles on the roads.
In addition to the ride-share turmoil, the subway system in New York has long a thorn in the side of its passengers. Issues from late trains to outdated equipment have left a vital part of the city’s infrastructure in need of massive repairs totaling over $100 billion.
9. Health Care
The healthcare industry across the nation is expanding and growing, passing up manufacturing and retail to take on the mantle of the largest employer in the United States. And in New York, the healthcare industry is a powerhouse, driven by technology to reinvent the wheel through new ideas and innovation. New York City is the hub for new health care initiatives like MedStartr, New York eHealth Collaborative, StartUp Health, and Everyday Health.
10. Food Service
There are more than one million restaurants operating within the United States, and one-fourth of the eateries are located in New York City. The restaurant industry in New York is a hungry beast that “consumes” almost $45 billion in sales every year and employs nearly 10% of the state’s workforce. However, even with the high sales ($30 billion a year), some restaurants will not make it — of the 1,000 places that opened in NYC during 2017, roughly 800 restaurants will close their doors within the first five years.
Interested in starting a business in New York? Check out Swyft Filing's comprehensive guide for forming an LLC in New York, from pros and cons on NY business ownership to steps new business owners must take that are unique to the state.
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