Economy in State Creeps Forward

Economy in State Creeps Forward
Job Growth Seen as Pivotal

Continued from the Home Page

Overall improvement in the state’s recovering economy has been glacial, recent reports suggest. Though Labor Department officials stated recently that New York added 25,000 private sector jobs in the second half of 2003, private-sector employment actually dropped 0.1 percent from January 2003 to January 2004.

And a state comptroller forecast posited that New York’s lagging job growth, combined with the federal deficit, could put a further drag on the sluggish recovery.

“True economic recovery for New York state depends on getting people back to work,” Comptroller Alan Hevesi said in the comptroller’s forecast released in March. “As more and more people return to well-paying jobs, consumer confidence and spending will also improve. The combination will serve to fuel our state’s economy.”

Members of the New York State Society of CPAs have been more positive than not about the prospects for recovery. The Society’s annual economic survey showed that 68 percent of CPAs polled thought the current economy was “fair” (as opposed to the 21 percent that called it “poor”). Another 52 percent said they foresaw local business conditions improving gradually over the next five years.

But, recovery is colored by local circumstances.

New York City, which lagged the rest of the state and country in emerging from the latest recession, has finally seen signs of recovery. According to New York City Comptroller William C. Thompson Jr., the city’s economy in the fourth quarter of 2003 saw its highest growth rate in about three-and-a-half years.

“Although in November 2001 the National Bureau of Economic Research officially declared the U.S. recession over, it took the city two more years to bounce back,” Thompson said in a statement released in March. “I am pleased that the city’s economy has inched out of its recession with both the increase of 4,300 jobs and a high growth rate in the fourth quarter.”

The report showed that the real gross city product increased to an annualized rate of 2.2 percent following a decline in the previous quarter.

All parts of the state continue to struggle with job growth.

“The economy is still sluggish,” NYSSCPA Buffalo Chapter President Mark J. Koziel, said. Clients, he noted, are still concerned with manufacturing job growth, and business leaders in the city of Buffalo have formed a group to make recommendations for how to improve that city’s economy.

“My problem is the growth that is shown is a financial growth that hasn’t translated into jobs,” NYSSCPA Brooklyn Chapter President Patricia G. Wright said. “There’s a great lack of real jobs. I see that in my local community and my church, where a lot of qualified people are being laid off. The jobs aren’t there. Employers are still waiting to see if they can add to their payrolls.”

Wright said the real test of the improvement in the local economy will be when college students graduate in late spring.

Mary MacKrell, the immediate past president of the Society’s Adirondack Chapter, suggested that the area around Glenns Falls, N.Y., has weathered the recession of the last few years thanks to a fairly mixed economy based on manufacturing, tourism near and around Lake George and other industries.

And anecdotally, the outlook seems to be bright, she said. CPAs at her firm have remarked that some clients have shown an increase in accounts receivables and payables despite little change in revenue, illustrating a faith that local businesses have in the future.

“They’re still doing business and they’re encouraged that business is coming back, but they’re slow to pay for investments. Not in a huge way, but it is something we’ve noticed in our firm,” Mackrell said.