6 Major New York Industries Fueling the Economy in 2021

By January 21, 2021 New York
New York Skyline

When it comes to the financial market, it’s difficult to predict what the future holds with a high degree of certainty. Nonetheless, researchers, investment strategists and financial analysts make predictions for what we can expect in the year ahead when it comes to the stock market. 

Fortunately, one prediction they generally have consensus on is that the global economy will rebound and grow as vaccine distribution ramps up throughout the year. Additionally, they say you can expect around a 5.5 percent uptick in the economic output in 2021 that is a continuation of the economic recovery that started back in third quarter 2020. 

That sunny financial outlook extends to New York, too, and what follows are 6 New York Major industries that market experts predict will drive GDP growth during 2021.

1. Financial Services and Insurance

New York is a global talent and tech capital, and because of this, many financial services and commercial & investment banks make it their home. Over 90 percent of occupations in commodities, securities and other investments are located in downtown NYC, and The New York Stock Exchange (NYSE) is the most influential securities exchange in existence.

Furthermore, the state is increasingly becoming the locale of choice for fintech and insurance-tech based businesses, including Brex, Oscar, PolicyGenius, MasterCard, BetterMortgage and Zipari. A flourishing economy also translates to good news for the corporate earnings of these companies, which are expected to grow by 21 percent this year. Researchers indicated that current economic recovery factors will lead to a favorable year for stocks, with J.P. Morgan saying that they expect investors to pile into the market in the first and second quarter of the year in a sort of “market nirvana” situation for equities.  

2. Homeland and Cybersecurity

Top colleges, raw talent and the country’s first drone testing corridor are fueling a growing cybersecurity and defense niche in New York. The state continues to support a growing cybersecurity industry that is hungry for products and services that shield computers, data, networks and programs from unauthorized access and digital attacks. These products and services run the gamut from development of hardware & software to better their cyber resiliency to multinational organizations with cybersecurity practices. 

As a key financial hub to major metropolitan areas that depend on a robust security infrastructure, New York is also a sizable market for private-sector homeland security providers that create solutions for firms in the state and beyond. Homeland and Cybersecurity customers include aerospace companies, Department of Defense contractors, defense product manufacturers and more. 

3. Clean Energy & Utilities 

President Joe Biden’s intent to rejoin the Paris Climate Agreement and his cancellation of the Keystone Pipeline represents landmarks in the climate fight and renewed focus on clean energy. These initiatives for a fair and working planet extolled by the new administration fits in with New York’s own commitment to clean tech and renewable energy, both of which are driving technology manufacturing and reinvigorating the Empire State’s economy. These initiatives establish New York State as a business destination for like-minded clean industry innovators looking to gain admittance to one of the world’s largest markets. 

In regards to conventional utilities, Fitch Ratings indicate that North American Utilities, Power and Gas entities will be stable in 2021. Fitch said that the Stable Outlook was based on “the expectation that the pandemic’s impact on the sector will continue to be benign and the regulatory environment will remain supportive.” The Stable Outlook is additionally supported by low commodity costs & interest rates and modest secular sales growth that will occur once the economic recovery gains traction.

4. Educational Services

Although it’s not technically considered a leading industry, educational services are one of the biggest drivers of the state’s economy; as such it has a significant impact on the state and its residents and has a role in attracting fresh talent that enters the business scene. 

Educational services provide 392,000 jobs that are split between the public and private sectors, and the sector typically grows at an average rate with total population and employment levels. The state has seen a huge increase in students attending college throughout the 21st century, and a large number of people entering the employment market in other New York sectors were educated within the state.

5. Professional & Technical Services

Certain industries from the professional & business services sector make the New York Significant Industry List put together by the Department of Labor (DOL); they  are professional, scientific and technical services and administrative and support services. According to data from the DOL, the professional, scientific and technical services group is the only significant industry that possesses all of the following: Faster-than-average salary growth, faster-than-average job growth rate and an average weekly wage that is above the NYS average.

 

The broad field of professional & technical services encompasses a great number of different professional groups, including lawyers, accountants, mechanics, marketers and those in similar professions. These professionals provide services to notable business sectors, rather than consumers, and for this reason, they are profoundly influenced by the ups & downs of economic cycles. In short, the way they operate often makes them beholden to these other industries’ success. 

6. Transportation

Non-store retailers, an industry that includes online shopping, is slowly taking bigger bites out of brick & mortar retailer’s bottom lines. The reasons for this are many, but the main one being the fact that electronic shopping businesses can handle higher levels of customer traffic. Another reason is that customers are not limited to a geographical area, resulting in much higher sales potential. 

Although the non-store retail sector is considered small by New York City standards, the transportation industry is growing and likely to continue to expand as the online marketplace absorbs increasing shares of retail revenue.

Saraval Industries: Serving Major Industries in New York

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