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The study, which was released Nov. 15, said even after payment of insurance claims and federal reimbursement for rescue, cleanup and infrastructure repair costs, the net damage to the economy is likely to be at least $16 billion in lost economic output. "If third-party reimbursement is delayed or inadequate, or if New York lags behind the nation in recovery from the national recession, the loss could be far greater." The report estimates that 125,000 jobs would be lost in the fourth quarter of this year as a direct result of the attack. "While many of these jobs will return, New York City will still have a net loss of approximately 57,000 jobs attributable to the attack at the end of 2003," the partnership said in the report. The NYCP brought together a group of consultants and economists to help tally and evaluate how the attacks of Sept. 11 would impact the main drivers of the city's economy, especially the financial services industry. Consultancies including A.T. Kearney, Bain & Company, Booz Allen Hamilton, KPMG, McKinsey & Company, Boston Consulting Group and PwC Consulting worked on the report. The group in turn worked with state agencies as well as the Federal Reserve Bank to cull economic data and provide assesssments of 14 separate private industry sectors. Not surprisingly, the study showed that lower Manhattan absorbed the greatest damage. In addition to the thousands of lives that were lost in the destruction of the World Trade Center, the downtown region lost 100,000 jobs along with close to 30 percent of office space in the wake of the attack. "This puts at risk many of the 270,000 jobs that are still located in the area south of Chambers Street." The financial services industry, which generates 24 percent of the city's $440 billion annual economic output and 14 percent of the city's tax revenue, was by the far the most impacted in the short term. From Sept. 11 through year end, financial services will account for $4.2 billion in economic output losses, the report said. "Seven major financial firms have been forced to temporarily relocate. Of the financial services jobs that have left lower Manhattan, about 32,400 have relocated within the city and 19,000 have left the city, at least temporarily." Because of a drop in international traffic, however, the damage to the tourism and retail sectors was even more stark, according to the report. New York's travel and tourism industry, which brings in annual revenue of $34 billion, is expected to lose between $7 billion to $11 billion in revenues by the end of 2003 and is likely to lose 25,000 jobs by the end of the year. New York's retail base (department stores, specialty shops and other retail outlets) of $51 billion is expected to lose $7.5 billion by 2003 as a result of Sept. 11 drop-off in shopping. NYCP president Kathryn Wylde said although the economic damage is massive, it is manageable if the public and private sectors work quickly. "We also need to work to make sure our key industries are protected," especially financial services, she said. Wylde and other members of the study urged the public and private sectors to make the following their most urgent priorities for rebuilding lower Manhattan: Fast track rebuilding of the downtown infrastructure (power grid, transportation and telecommunications) to 21st Century standards. Secure federal economic aid aimed at protecting the city's status as a world capital of commerce and finance. Restore confidence by investing in comprehensive, innovative security measures. Execute a five-borough strategy to retain and expand the financial services industry. Quickly restore Lower Manhattan as a functioning community for workers, small business and residents. Take immediate steps to promote New York for business and tourism. "September 11th tested New York City and, for the most part, we held up well. At the same time, senior management of every business has had to reevaluate the geographic concentration of their talent and facilities, security, space needs and data and phone systems. Business decisions are being made now," the report said. "To protect the interests of the city and of the national economy, government must provide decisive leadership for the many stakeholders in the private sector who are committed to ensuring that New York comes back -- stronger than ever." Bibliography: Word Count: 757
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