Market Uncertainties Unlikely to Hurt Economy of Downtown Manhattan, Says Developer of Pace Index

Job cuts at large Wall Street firms do not mean the economy of downtown Manhattan is headed for a fall.



Farrokh Hormozi, Ph.D., Pace University, 914-422-4285, cell 646-644-2367,

Tom Schuyler, M. Booth & Associates, 212-539-3223, cell 646-344-9427,




Disputing gloom, economist finds “slight dip” in recent data an “aberration.”

New York, NY, October 23, 2007—Job cuts at large Wall Street firms do not mean the economy of downtown Manhattan is headed for a fall.

That bullish forecast is based on the latest Pace Downtown Index (PDI), a composite of weighted economic indicators for the area south of Canal Street developed by Pace University three years ago. The Index has regularly come up with findings that are supported several months later by data from federal and local agencies.

The third quarter PDI was fractionally down from the second quarter – by 0.05 points, to 106.27. However it was still higher than its first quarter value of 106.21.

Moreover, “looking at the long-term trend line, at this point we may consider the reversal an aberration which will soon pass,” writes Farrokh Hormozi, Ph.D., the Pace economist who supervises the index, in the latest report on the data page.cfm?doc_id=10618.

The reason is real estate, Hormozi says. “So far, the Lower Manhattan economy has been relatively immune to the bursting of the real estate bubble and is largely unaffected by the sub-prime default problem: an area where the average weekly income is over $8,000 cannot be the target of loan-sharks and teaser rates.”

The “slight dip” “shows resilience in the face of harsh problems facing the financial markets,” Hormozi writes. Despite the dip, the third quarter economy of lower Manhattan grew “better than the economies of both the City of New York and the country as a whole.”

Hormozi adds that those who now see gloom ahead include many who thought Downtown would never recover from 9/11.

The PDI’s statistical weightings gauge the relative influence on the downtown economy of not just the financial markets and the overall Gross City Product, but also of changes in the total commercial real estate vacancy rate. The raw real estate data is supplied by Cushman & Wakefield.

The PDI report will be available before 2pm by contacting Tom Schuyler to request a copy be sent, after 2pm it will be available online at /emplibrary/ACFB4A.pdf.

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