The Impact of the World Trade Center Attacks on New York City's Economy

The Impact of the World Trade Center Attacks on New York City's Economy

A study by the New York City Partnership and the Chamber of Commerce estimates that New York City's economy will sustain a gross loss of about $83 billion and lose 57,000 jobs over three years as a result of the World Trade Center attacks.

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.