City’s Economy Shows Signs of Health

City’s Economy Shows Signs of Health
CPAs React with Cautious Optimism

By Jay Dismukes

Continued from the Home Page

“I think things are better, but it’s not like a boom,” said Scott Cheslowitz, whose Great Neck firm deals with many New York City clients. “You’ve seen an uptick in the construction industry, so that’s positive. And as a whole, you’re seeing some good things, but it’s the bigger companies that experience the change first, and it’s also specific to different industries.”

Adam H. Reiss, senior manager with American Express Tax and Business Services Inc., took a similar position to Cheslowitz.

“I see clients who are doing well and I see clients who are still struggling. So that number (the 7 percent growth rate) may be true, but I don’t think it applies to everyone,” said Reiss, whose views do not necessarily reflect those of American Express.

According to the comptroller, William C. Thompson Jr., the 7 percent increase is the city’s highest growth rate since the fourth quarter of 1999 and is the second consecutive quarter of growth. In a press release, he said that the spike in jobs (seasonally adjusted) and the increase in personal income tax revenues were the two primary factors fueling the economy. In part due to higher city tax rates, personal income tax jumped 27 percent from first quarter 2003 to first quarter 2004.

Anecdotal evidence appears to back up the comptroller’s findings on job growth.

Based on her own experience, Marcy Bajusz, secretary of the NYSSCPA’s Manhattan/Bronx Chapter, said there appeared to be a steady stream of job opportunities. While interviewing with firms, Bajusz noticed a lot of practices that were looking for people to fill positions.

Jude Coard, a Manhattan CPA whose firm draws clients from the restaurant, manufacturing and real estate industries, has also witnessed a promising employment trend.

“Some of our clients have seen an uptick and have had a surge in hiring,” Coard said. “There’s a turnaround we’ve seen, especially downtown. Not that it (the economy) has recovered fully, but it’s coming back.”

Thompson’s report points out, however, that, compared to the nation’s other metro areas, the city’s job growth in the first quarter is the fifth-weakest of the 20 largest. And compared to last year’s first quarter, New York City jobs actually fell two-tenths of a percent.

Given these findings, and as Reiss noted, the city’s employers and its workforce still have a tough road ahead.

“I still see plenty of companies that have had cost increases that were unexpected. They are not falling apart, but they’ve had to go back and reassess their overall operating costs and make cuts where they were deemed necessary,” Reiss said. “I don’t think from a finance perspective it’s gotten much easier for companies even though there has been growth. I don’t think anyone has had it very easy in still getting financing from banks at this point.”

Since December 2000, when New York City first experienced negative growth, the city has lost 215,200 jobs, seasonally adjusted. The comptroller’s office last month reported that New York City’s unemployment dropped to 7 percent in May from 7.5 percent in April, even though the city lost 1,700 jobs.