With a New Mayor, NYC Expects a Business Boost
NEW YORK — FORGET the imminent arrival of the winter season next week. Warming winds of change are suddenly blowing through the Big Apple's long-troubled business sector.
The changes in part reflect the improving national economy, as well as some people's perception that Mayor-elect Rudolph Giuliani may be more accommodating to the city's business community than his predecessor, Democrat David Dinkins.
Mr. Giuliani, a Republican, will be sworn into office in a public ceremony Jan. 2.
Giuliani has been given some breathing space in his pledge to help improve the business climate. Crime is overshadowing the economy as the dominant local political issue - a factor that was evident in polling data even before the November mayoral election.
At the very least, the expanding national economy provides Giuliani with a ``window of opportunity'' to help spur local business growth, says Lee Miringoff, director of the Marist Institute for Public Opinion, which conducts frequent polls in the New York area.
New York City lost an estimated 375,000 jobs in the recent recession, roughly half of the 700,000 jobs lost in the greater-New York metropolitan region, including northern New Jersey and Connecticut. While most of the lost jobs were manufacturing and service positions, many highly paid professionals - particularly older males in middle-management positions - found themselves out of work.
In addition to pushing up dollar outlays for social service agencies, the business downturn has reduced local tax revenues. Some city officials now say the mayor-elect could face revenue shortfalls of up to $2 billion next year.
BUT after years of losses, there finally appears to be new job growth in New York City. ``The recession is bottoming out here, and we see 1994 shaping up as a time of gradual economic improvement,'' says Amos Ilan, manager of economic trends for the Port Authority of New York and New Jersey, the area's main regional planning group.
Job growth in the New York area is expected to reach at least 0.5 percent next year. While the gain is minimal, it represents ``the first year of actual net job creation since 1989,'' Mr. Ilan says. ``There will be a slow but steady improvement in the economy,'' propelled by gains in the financial services sector, service trades, and - late in 1994 - companies that trade abroad.
Trade-linked firms will benefit from expanding economies in Europe and Japan, Ilan adds. Tax collections also will be bolstered by the growing economy, which will provide some help for Giuliani, he says.
Earlier this week, Giuliani appointed long-time confidant Peter Powers as deputy mayor for operations. Mr. Powers, an attorney, will oversee such sensitive areas as labor relations, transportation, and emergency services, as well as the city's department of general services.
Political analysts stress that Giuliani will need to gain as many concessions as possible over time from the city's municipal labor unions - a task that proved daunting even for Mayor Dinkins, who had close ties to organized labor.
New York City businesses are expected to add new jobs in the first quarter of 1994. About 14 percent of the firms in New York plan to add employees, compared with 10 percent who plan to reduce staff, according to a new survey by Manpower Inc. About 72 percent of the businesses envision no change in employment.
The 14 percent of firms planning to hire is still slightly under the national pattern of 18 percent, says Mitchell Fromstein, chairman of Manpower. Nationally, Mr. Fromstein notes, the gap between companies hiring new workers and firms firing workers is greater than at any time in the past four years.
Low inflation, gains on Wall Street, and an expanding service sector will spur local job growth, Ilan says. Ironically, the financial sector's gains stem in large part from the industry's downsizing in the late 1980s, when many administrative and clerical jobs were eliminated, saving banks, brokerage houses, and insurance offices substantial labor costs.
And cutbacks continue. Lehman Brothers Inc., an investment bank, dismissed 7 percent of its brokerage force - about 30 brokers - this week. The decision was apparently taken to help prepare for a possible plan to take the firm public in 1994.