Big Apple suburbs thrive amid adversity

By David Schepp
New York, US

While Manhattan's economy has struggled over the last two years in the wake of the 11 September terror attacks, many of its suburban communities have prospered, including neighbouring Rockland County.

This cookie-cutter piece of southern New York state is by many people's standards bucolic.

Rockland County has attracted weary city dwellers

The green, rolling hills, rocky outcroppings and relatively cheap housing make Rockland County a desirable place for weary city dwellers to escape to and yet still live well within commuting distance of Manhattan.

With the New Jersey state line as its southern border, Rockland is one of New York's most southerly counties outside of the Big Apple. It is also one of its tiniest but an economic dynamo in its own right.

"The strength of its economy belies the smallness of the area," says Marc Goloven, analyst at investment bank JP Morgan Chase in a recent research note.

The county is chock-full of small- and medium-sized companies where job dislocations are not taking place unlike the numerous corporate downsizings that have dogged Manhattan.

Business mix

While New York City languishes under an unemployment rate of around 8%, joblessness in Rockland, although having risen slightly in recent months, is half that.

Rockland's unemployment rate in August was 4%, according to the New York State Department of Labor, while the five boroughs of Manhattan reported an average joblessness rate of 8.1%.

This resilience is largely due to the combination of a vibrant small-business base and the thoughtful oversight of the economy Marc Goloven JP Morgan Chase

What's more, the job count in Rockland never stumbled during the painful economic correction of 2001 and 2002, while New York state as a whole has lost a quarter of a million jobs since the turn of the millennium, according to state figures.

Rockland owes much to an enviable mix of businesses and a reduced reliance on manufacturing. Four decades ago, one in three jobs involved factory work.

Today, it represents just 10% of total jobs and the trend continues downward.

As a whole, the Hudson Valley, in which Rockland lies, saw manufacturing decline to 9% of employment in 2002, down substantially from the 23% reported in 1979, according to Marist College Bureau of Economic Research.

Resilient economy

The significant contraction in factory jobs means manufacturing has slipped to fourth place among the area's largest employment sectors, Marist says, behind services, trade and government.

The Palisades Center has helped to diversify the local economy

The economy is well diversified between professional, retail and manufacturing industries, analysts note, making the county less susceptible to job losses.

But that isn't always the case. For example, 56-year-old Steven Grossman, a fundraiser who lost his job 10 months ago, now brings home much less than the $60,000 annual salary he earned while working for the American Cancer Society.

"I'm driving a limo now," Mr Grossman says, adding that he works much longer days and doesn't come close to earning what he used to.

"If you look at the hours compared to what I am making, it's not even close," he says. "But you got to pay the bills."

But as evidenced by Rockland County's low unemployment rate, Mr Grossman is far more the exception than the rule.

"This resilience is largely due to the combination of a vibrant small-business base and the thoughtful oversight of the economy by the county's political and economic stewards," Chase analyst Mr Goloven says.

Corporate magnet

Local officials' prowess was witnessed recently in landing Avon Products Inc.'s $100m research and development centre, which broke ground in August, replacing the current one in the village of Suffern.

After threatening to relocate the research and development facility out of state, county and state officials hammered out a deal of tax breaks to keep the beauty-products manufacturer and retailer in Suffern.

The shops have discovered the purchasing power of Rockland County consumers

While the concessions weren't without their critics, the community by and large stood behind them, believing the 350 jobs Avon is expected to bring were worth sacrificing local tax revenue.

Avon isn't the only corporate presence felt here, healthcare and pharmaceutical companies, such as Wyeth and Aventis AG, have offices in the area.

But it is retail and services that make up the bulk of recognisable corporate America's monikers.

The presence of chains blossomed after the Palisades Center shopping complex opened here five years ago.

There were many predictions of doom and gloom that we were going to suck the life out of retail when we opened John Mott, Palisades Center

The mall boasts over 300 shops, restaurants and eateries, as well as an ice-skating rink, a 21-meter high Ferris wheel and an Imax theatre.

"There were many predictions of doom and gloom that we were going to suck the life out of retail when we opened," says John Mott, general manager at Palisades Center mall, adding that exactly the opposite has happened.

"It's resulted in a discovery of the purchasing power of Rockland County consumers by the national retailers," Mr Mott says.

Prosperity has its trade-offs, however. Among them are sky-rocketing housing prices, which averaged $342,000 in June, according to the New York State Association of Realtors, compared with $176,500 nationally.

That fact threatens to drive away Rockland's next generation of entrepreneurs, local activists warn.

Burgeoning entrepreneurs, faced with unaffordable housing and other high costs, might look elsewhere in the hopes of pursuing business ownership.

In turn, this may undermine the rock-solid economic foundation the county has so carefully cultivated.