Crains New York - January 7, 2013 - (Page 11)

REPORT ECONOMIC OUTLOOK INSIDE Temporary solution Shortterm work can lead to a permanent job, but employees have fewer benefits PAGE 12 What’s up, New York? A status report on trends in the five boroughs PAGE 12 Shanghai on the Hudson Throngs of rich Chinese tourists drop wads on bling and baubles. Retailers say, ‘Ni hao’ BY JACOB HODES A tour guide led a dozen visitors into the quiet, plush luxury of Wempe, which sells fine watches and jewelry on Fifth Avenue, and the store came alive with the sounds of Mandarin. Half an hour later, another tour group followed, also Chinese. And then another. No one wasted any time. The tours operate on a tight schedule, and visitors snapped up costly watches, including a diamondstudded option from JaegerLeCoultre that cost $36,473 with tax. “In 25 years, I’ve never seen anything like it,” said Ruediger Albers, the store’s general manager, who sold about $75,000 worth of merchandise to the Chinese visitors that day. “In the afternoon, Fifth Avenue feels like Shanghai.” The number of Chinese tourists visiting New York is exploding, up 86%, to 427,000, in 2011, with another increase expected when last year’s numbers are finalized. The phenomenon makes Mayor Michael Bloomberg very happy because more travelers from emerging markets like China are crucial to reaching his goal of 55 million total visitors in 2015. It’s an ambitious target, nearly 6% higher than the record 52 million who came to the city in 2012. The upsurge is driven by the wealth of China’s rising new elite, along with simpler visa requirements and more flexible logistics. Until a few years ago, making the trip was “a hassle,” said David Dong, the manager of L.L. Tours, a local bus-tour operator. At ChiSee CHINESE TOURISTS on Page 13 AND MORE KEEP COMING Number of tourists to NYC (in millions) YEAR GOOD TIMES: Wempe store general manager Ruediger Albers sold $75,000 in merchandise to Chinese visitors in one day. INTERNATIONAL DOMESTIC TOTAL buck ennis 2008 2009 2010 2011 2012 9.5 8.6 9.7 10.6 11.0 37.6 37.0 39.1 40.3 41.0 47.1 45.6 48.4 50.9 52.0 Source: NYC & Company City’s prospects look ever brighter T he New York City economy began its upward climb almost three and a half years ago, in the fall of 2009, and its performance since then has been spectacular—at least as compared with the rest of the nation. And here’s the really good news. After a modest slowdown in growth this year, the good times will continue for the foreseeable future, say the people who study the city’s economy. GREG DAVID Here is why they may be right, and why they may be wrong. Start with the numbers. From the beginning of the recovery, New York has added a little more than 200,000 jobs, an increase of 7%, while the country as a whole has seen an uptick of less than 2%. The city’s employment is at a record level, but the U.S. is still 4 million jobs short of its last peak. And here’s the most important fact:This is the first time the city economy has done well without Wall Street driving it. History suggests the city can do better because New York is noted for very long economic expansions (and very long downturns, too). As the chart on page 14 shows (using annual averages, the best historical measure), the last three periods of good times averaged seven years. They also produced far more jobs than the current recovery. As for this year, the consensus is that 2013 won’t be as good as 2012 (see story on page 1), even with the resolution of the fiscal-cliff tax rates and with Sandy rebuilding efforts boosting the hard-hit construction sector. The reason is that tourism and retail will do OK but not as well as last year. Growth has been so strong in those areas that a pause is inevitable. European economic woes are clearly reducing tourism from key markets like Britain and the eurozone countries. See CITY on Page 14 January 7, 2013 | Crain’s New York Business | 11

Table of Contents for the Digital Edition of Crains New York - January 7, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
SMALL BUSINESS
BUSINESS PEOPLE
OPINION
REPORT: ECONOMIC OUTLOOK
GREG DAVID
FOR THE RECORD
REAL ESTATE DEALS
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE BREAKFAST
OUT AND ABOUT
SNAPS

Crains New York - January 7, 2013