Brooklyn's Progress
February/March 2008

BY JILL D’AMICO

In conjunction with the Brooklyn Chamber of Commerce, Sovereign Bank conducted an Economic Outlook survey at the end of 2007, looking to gauge the economic climate and forecast how the coming year would be for Brooklyn and the metropolitan region. The results compiled assure that even with questions looming about the economy’s strength, Brooklyn is still a welcoming environment for business, something that should help the borough continue its steady growth.

The full results were revealed at the 2008 Economic Outlook Breakfast, sponsored by Sovereign, and held at the New York Marriott-Brooklyn Bridge on Jan. 30. Sovereign’s Metro NY-NJ Community Banking President Terence Mitchell and Brooklyn Chamber of Commerce President and CEO Carl Hum co-hosted the program.

A panel of experts discussed the results, moderated by Mr. Hum, and included Brian Coleman, CEO of the Greenpoint Manufacturing and Design Center, Tom Early, Executive Director of Health Plus, and Joan Bartolomeo, President of the Brooklyn Economic Development Corporation.

“The Chamber is pleased to partner with Sovereign Bank to bring our Members timely and relevant information from experts in finance and the economy," said Mr. Hum. “This information is important to our membership as they sustain and help drive the Brooklyn economy.”

The keynote address was presented by Robert C. Lieber, the newly appointed New York City Deputy Mayor for Economic Development and Rebuilding.

“The Mayor’s five-borough economic development strategy has helped catalyze tremendous growth in Brooklyn over the past six years, and our agenda going forward is every bit as ambitious as it’s been,” said Deputy Mayor Lieber in advance of the event.

Brooklyn’s Progress economic columnist Maria Fiorini Ramirez, regularly cited by media as among the nation's most accurate economic forecasters, also spoke at the event.

She pointed out that Brooklyn tended to fare better than other boroughs when the economy soured, citing that layoffs after the 9/11 attacks affected Manhattan and Queens to a greater degree than Brooklyn. Brooklyn’s strong small business backbone and diversity of businesses helped weather the storm.

Survey Says…
The survey was conducted among two groups – Sovereign consumers and the membership of the Brooklyn Chamber, which includes business leaders throughout the borough.

While both saw eye-to-eye on the challenges facing Brooklyn, such as high energy costs and the overall cost of living, the surveyed strengths of Brooklyn were varied.

“Brooklyn’s business leaders have a very different perspective on the borough’s strengths as we compare them to consumers,” said Josephine Savastano, New York Commercial Banking Market President at Sovereign Bank, who presented the results.

A majority - 60% - of the business faction said local economic development efforts were the borough’s biggest strength, while only 16% of consumers felt the same. Businesses also cited the quality of public education and access to higher education as great strengths.

Consumers felt Brooklyn's low crime rate, which was last on the list of strengths for business leaders, was its greatest strength. They were also positive about the borough’s quality of life and access to health care.

Looking Ahead
The businesses surveyed expect that attracting new customers will be the top challenge faced in 2008, followed closely by obtaining credit in a tight market, which many a valid concern with the markets slowing, though New York City is in a good position to weather any coming storm, according to experts.

“We recognize our overall economy is cyclical, which is why we have exercised fiscal prudence in the past and will continue to work with organizations like the Brooklyn Chamber of Commerce in the future as we make strategic investments to improve the quality of life for residents and make the city even more attractive to businesses,” said Deputy Mayor Lieber.

Consumers anticipate their economic situations being the same as last year, and expect home prices and values to continue to climb. Their anticipated challenges are maintaining their current living standard and saving for retirement and medical expenses, two large investments. Debt is also a concern, which will factor into people looking to hold on to their money.

The workforce is a good barometer of the economic situation, and the good news is that just over half of businesses surveyed plan on hiring this year. Less than 20% plan on decreasing their workforce.

Overall, business leaders are anticipating slow growth. Compared to other locations, most business leaders are convinced that Brooklyn does at least a comparable job – if not better – at attracting, retaining, and expanding business here. Thanks to Brooklyn’s popularity and foothold in the city’s economic engine, that comes as no surprise.