The five counties that make up New York City have a combined annual gross domestic product of $850 billion, according to the Bureau of Economic Analysis, part of the U.S. Department of Commerce. As COVID-19 begins to spread for a second time this year, it means almost 5% of national GDP will be battered again. Hotspots already have developed in over a dozen ZIP codes in the city and will spread.
New York City’s five boroughs carry the names of counties as well. New York County is Manhattan, Queens County is Queens, King County is Brooklyn, Bronx County is the Bronx, and Richmond County is Staten Island. The largest by far based on GDP is New York County, with a figure of $600 billion. Much of that comes from the financial industry, tourism and retail. Stores, hotels and restaurants already were devastated by the spread of COVID-19 in March and April. It was hoped that warmer weather and a drop in infections would reverse that.
Instead of reversing, New York City faces a cold winter that will drive people inside. This alone will buckle the restaurant business, which currently relies largely on outdoor dining. A COVID-19 spread will knock out indoor dining, which was recently approved, as well. The spread also will undermine hotel bookings.
Retailers will be hurt as much as restaurants. Most retail locations were closed in March, April and some of May. These ran from single store locations to large national chains with multiple locations. A walk through Herald Square and Times Square at the height of the spread of the disease showed the extent of the damage. Neither of these two parts of the city has entirely regained its foot traffic. Now, the traffic will fall again.
The financial industry will do better. Most of its transaction and deposit based operations do not rely on face-to-face activity, although large banks have hundreds of branches in New York. However, many of the employees in the sector work from home. Some of these are in New York City. Many live outside the borders proper, in suburbs or nearby cities.
New York City is one example, a very large one, of the effect another increase in COVID-19 cases will undermine GDP in cities. That, in turn, affects the American GDP as a whole. The New York City problem is really a problem for the entire country.