NYC Year-Over-Year Job Growth Is Slowing Down, And The Office Market Could Be Taking A Hit
With a new jobs report slated to be released this Friday, Savills Studley economist Heidi Lerner says NYC’s year-over-year job growth is slowing down dramatically, which can be a bad sign for office landlords.
Don’t worry, it’s still growing, as it’s done every month since March 2010. But, Heidi says, the total job growth in the 12 months through July 2016 was 98,000. While still impressive, Heidi says it's a significant downgrade from the 106,000 jobs added through July 2013, the 132,000 jobs added through July 2014 and the 128,000 jobs added through July 2015.
NYC’s year-over-year office-using employment growth now hovers around 1.4%, a a pale fraction of the over 3% rates seen in years prior. And with a ton of new space hitting the market in the next few months, absorption might take a hit, and landlords are going to be hard-pressed to raise rents.
Another worrying factor is companies already set up in the city might not be growing in the upcoming weeks. Of 521 publicly traded companies stationed in NYC, only 127 had annual revenue growth of 5% or more. Without a boom in sales, these companies will keep their head counts stable (or even cut them) to preserve costs.
