Business English: New York's economy sees renewed vigour

Hell's Kitchen, once a gritty Manhattan den of criminals, prostitutes and speakeasies, has been transformed in recent years into a playground for New York's food and drink lovers. As such it is a barometer of the city's economic health and the area duly slumped in the downturn.

But the neighbourhood is bustling again. "We are seeing more people coming through our doors," said Alberto Tartari, the chef and owner at Il Melograno, an Italian restaurant in the district. "Business is really picking up again and from now until December at least we hope to see good business."

That renewed vigour is reflected across the city. New York is enjoying sturdy growth, according to the Federal Reserve Bank of New York's monthly index. Taking into account indicators such as payrolls, income and unemployment, data for February showed the index increased at an annual rate of 2.4 per cent, following a similar increase in January. The index has risen 3.1 per cent over the past 12 months.

  Tourists in Times Square, New York

The city owes its fortunes largely to the wealthy. "Like other large internationally-oriented cities with high concentrations of wealthy people, New York is in a bubble and can fend off some of the broader contractionary forces and can recover quicker," said James Parrott, deputy director and chief economist at the Fiscal Policy Institute. The city entered into recession later and started its recovery sooner than the rest of the country, he said.

New York's per capita income stands at 123 per cent of the national average. At the same time, tourists from home and abroad helped sustain the city's restaurant, retail, leisure and tourism industries through the bad times. A record 50.5m visitors came to New York last year and they spent USD32bn, according to city government statistics.

"Americans who might have otherwise vacationed in Europe, for example, stayed domestic and instead came to New York, while people from abroad found the US relatively cheap for buying products," said Jason Bram, senior regional economist at the Federal Reserve Bank of New York. "Additionally, people are substituting to be thrifty. Instead of taking the family on vacation to the Bahamas, they would go to a restaurant and a Broadway show."

The city's economy grew at a sustained pace of nearly 5 per cent in 2010 and close to 4 per cent in 2011, compared to New York state which grew at an average rate of 2 to 3 per cent in both 2010 and 2011.

Private sector jobs in the city rose at a rate that was almost 60 per cent greater than the country as a whole in 2011. New York created more jobs than the next 10 largest cities combined over the past two years, the city government said. Labour department figures show city employers in January added the highest number of jobs in a single month in 23 years. Most of these new jobs were in the services industry - up by more than 31,000 in the year to December 2011, according to the New York City Economic Development Corporation.

But New York's economic future is not without challenges. Finance, insurance and real estate were hit hard in the downturn. In spite of diversification into sectors such as tourism and technology, the city's economy is strongly linked to Wall Street, which accounts for about 12 per cent of total employment and 30 per cent of earnings, according to Fitch Ratings. Reforms to financial regulation, reduced bank profits and bonuses, and concern about the European debt crisis will continue to weigh on the city, analysts say. There is still a shortage of 27,000 jobs in the finance sector, they add. Meanwhile, unemployment is at 9.3 per cent, above the national average of 8.3 per cent.

Nevertheless, Mr Tartari, the restaurant owner, remains confident. "At one point I did consider selling this place. I have three children to support and we did struggle at the start of the recession. But now I'm positive as I've started to work well again. We are entering into the good season," he says.