The employment profile is the result of identifying and analyzing trends in industrial and non-industrial (goods producing vs. service providing) business activity within the Fashion Center BID study area, Manhattan, and the City as a whole. Ending with the 4th quarter 2002, the NYS Department of Labor issued data that is based on the SIC (Standard Industrial Classification) system. On a citywide basis, the most recent figures are provided on a monthly basis, however, for Manhattan and New York City overall, we have used data that represents an annual average or the latest quarter in order to maintain comparability. For the Fashion Center BID, we have utilized data that reflects the boundaries defined by zip code 10018, as this is the smallest geographic area applicable to the Fashion Center BID.

Since our initial report in 1994, the employment profile highlighted "Fashion Industry" businesses by identifying the three SIC (Standard Industrial Classification) codes that represent the bulk of the "Fashion Industry". They are: SIC 22 (Textile manufacturing), SIC 23 (Apparel manufacturing) and SIC 513 (Apparel wholesaling). Based on the 4th Quarter 2002 data using the SIC code system, these industry groups represent 33.5% of the total employment in the Fashion Center BID.

While many other businesses support, or are related to these primary "Fashion Industry" businesses, they are not within these specific SIC codes and are virtually impossible to track as their official descriptions can cross over into non-fashion related activities. This will continue to be true even as the new North American Industry Classification System (NAICS) system for classifying industry groups is in use.

It is important to note that the 4th Qtr 2002 employment data was the last period based on the Standard Industrial Classification (SIC) system for categorizing the industry of each business. The new NAICS system has been instituted and the employment data starting with the 1st Qtr 2003 will reflect the change-over to the NAICS.

In essence, the NAICS categorizes establishments by their function and not the business activity of the enterprise. For the Fashion Center BID area, fashion-related companies whose function is considered management or administrative support will be re-classified from a "manufacturing" or "wholesaling" category under the SIC system to a "professional & business" category using the NAICS. Under the NAICS, the companies within the "textile and apparel manufacturing" and "apparel wholesaling" categories will truly represent these functions, while companies that perform management and administrative support functions, even though related to these "Fashion Industry" categories, will be listed under the major heading of "professional & business".

Therefore, the fashion-related service companies will no longer be associated with a category that suggests some connection to the "Fashion Industry". In effect, the 1st quarter 2003 data is the new starting point and the NAICS employment data will no longer relate to prior periods. For this reason, we have presented the 1st quarter 2003 and the most recent statistics in a separate section following "Historical Trends."

Historical Trends (1980 - 2002)

By the end of 2002, total New York City employment has diminished. Total non-agricultural, private sector employment as of the 4th quarter 2002 was reported to be 2,931,959, a 1.4% decrease from the 4th quarter 2001. Overall, "Fashion Industry" employment continues to decrease over time; however, "Fashion Industry" employment in New York City actually showed an increase of 7.1% between the 4th quarter 2001 and the 4th quarter 2002. As of the 4th quarter 2002, New York City's "Fashion Industry" was reported to be 81,365. This is not a reversal of the overall trend which shows a decline in "Fashion Industry" employment, as the figure is well below the levels of the early 1990's and almost 21% less than the 1st quarter of 2001 figure noted in an earlier report. It is, however, a reflection of the disastrous impact of September 11th on the "Fashion Industry" and the City as a whole. The 4th quarter 2001 employment figures clearly measure the major disruption and negative impact of the attacks on September 11, 2001.

This slowdown in the citywide employment has impacted all of the boroughs, especially Manhattan. Total Manhattan private sector employment in the 4th quarter 2002 was reported to be 1,803,556, down 2.3% in the past year. Manhattan's "Fashion Industry" employment has also declined to 58,877, a drop of 4.8% from last year.

Non-agricultural, private sector employment in the Fashion Center BID Zip Code (10018) was reported to be 82,609 in the 4th quarter of 2002. The "Fashion Industry" employment decreased significantly in the apparel manufacturing and less so in textile manufacturing, while apparel wholesaling increased slightly between 2001 and 2002.

Overall "Fashion Industry" employment was at 27,652 as of the 4th quarter 2002, a decline of 2,268 employees from 2001. The impact of the "Fashion Industry" within the overall BID employment picture has continued to diminish and the "Fashion Industry" only represented 33.5% of the total BID Zip Code employment by the 4th quarter of 2002.

The following charts indicate the percentage change from the prior year in total private sector employment and manufacturing employment in New York City, Manhattan and Zip Code 10018 (the Fashion Center BID's primary zip code), during the years 1998 - 2002. As can easily be seen, total employment has fluctuated according to the economy, while Manufacturing Employment has consistently declined.

New York City - Total Employment

The economic expansion of the 1980's provided the impetus for growth in New York City's work force. However, during this time of expansion, the manufacturing sector of the economy lost over 166,000 jobs. The recession of the early 1990's only exacerbated this trend. By March of 1996, total employment was down almost 4% from 1990 and manufacturing employment declined by an additional 21.2% to 268,200.

The downward trend in total employment started to reverse itself in 1997, as total employment in the City rose by almost 80,000 to 2,886,500. However, manufacturing employment continued its decline.

By 2000, citywide employment has increased to record levels (3,079,272 employees). Gains in the construction, service and FIRE (Finance, Insurance, Real Estate) sectors more than offset the continuing declines in the manufacturing sector, which is at its lowest level ever.

By the 2nd Quarter 2001, the economic slowdown impacted employment and total New York City fell to 3,050,066. In the ensuing 6 months employment rose to 3,153,800 persons much of this in the construction sector and in part due to the World Trade Center clean up operation.

According to the NYS Department of Labor, 4th Quarter 2002 data indicates total private sector employment in NYC has decreased 1.4% between 4th quarter 2001 and 2002. Employment in each industry sector has also declined, except for the category known as "unclassified". The dramatic increase in this category is indicative of the limitations of the Standard Industrial Classification (SIC) system referred to above, which has outlived its usefulness as a guide to categorizing industries. With the new NAICS, virtually all of these "unclassified" industries have been allocated to a category that provides a clear definition of the industry's function in the marketplace. The NYC employment trends for the period 1980-2002 are presented in Exhibit 1.

Open Exhibit 1

NYC - "Fashion Industry" Employment

The continuing declines in the Manufacturing sector have had an impact on "Fashion Industry" employment, as Apparel manufacturing has historically played an important role in the New York City economy. The Apparel and Textile Manufacturing sectors in New York City declined dramatically, from 104,415 in 1991 to 92,900 by 1995, and then to 84,300 by 1998. In 1999, employment in these sectors decreased to 74,360 and then declined further to 67,734 in June 2000, and in the 1st quarter 2001, the figure dropped to 56,705. By the 4th quarter of 2001, the employment in the Apparel and Textile Manufacturing declined again to 39,223. However, by the 4th quarter 2002, these sectors had increased to 41,394, a 5.5% rise, a recovery from the disastrous events of September 11, 2001.

More significantly, their percentage of the total New York City manufacturing sector continues its decline from 33.6% in 1991, to 29.4% in 1999, to 27.8% in June 2000, and to 24.7% by the 1st quarter of 2001. The 4th quarter of 2001 indicated that employment within the Apparel and Textile Manufacturing sectors as a percentage of total NYC manufacturing reached its lowest point at 18.3%, no doubt exacerbated by the post-September 11th trauma. The increases in the 4th quarter 2002 indicate a rebound from the immediate post-September 11th figures.

The percentage of total manufacturing continued its long term decline, and represented 21.2%. However, the overall downward trend remains significant. This is clearly evident, as the Apparel and Textile Manufacturing sub-sectors, have declined more rapidly than the overall Manufacturing sector throughout the City.

The Apparel Wholesaling sector has historically fared better. It had moderate employment increases in 1995, and stabilized in 1997 and 1998. Since 1998, Apparel Wholesaling has increased slightly; however in recent years, there has been a decline. As of the 4th quarter 2002, Apparel Wholesaling had 39,971 employees. Combined, the employment in the three groups that comprise the “Fashion Industry” in the 4th Quarter 2002 stood at 81,365, it lowest level in the past decade. Exhibit 2 presents this data.

Open Exhibit 2

Manhattan - "Fashion Industry" Employment

The current decline in the "Fashion Industry" employment figures has not only taken place citywide, but also in Manhattan. The overall manufacturing sector, and the "Fashion Industry" manufacturing sector in Manhattan have continued to decline. This is in line with the overall private sector employment decline throughout the City in general and Manhattan, in particular.

In the 4th Quarter 2002, total Manhattan manufacturing employment experienced a deep decline to almost 113,000, and the Textile and Apparel Manufacturing sector decreased to 22,758. The Apparel Wholesale sector showed relative stability in the past year with 36,119 employees. In total “Fashion Industry” employment represented only 3.3% of Manhattan’s total private sector employment in the 4th quarter 2002, which was the same as 2001, and the lowest percentage ever. Exhibit 3 indicates the figures for Manhattan between 1991 and 2002.

Open Exhibit 3

Fashion Center BID

In order to track employment within the BID, it was necessary to slightly expand the study area, as Zip Code information is the smallest geographic area reported. Zip Code 10018 has been used as the basis for estimating both total BID employment, as well as "Fashion Industry" employment in the area. Zip Code 10018 is slightly larger than the actual BID, although it does not include the businesses within the BID on the north side of 35th Street. Zip Code 10018 extends from the westside of 5th Avenue to the Hudson River; from 36th Street to 42nd Street, and north to 41st Street between Fifth and Sixth Avenues.

At the 4th quarter of 2002, employment in Zip Code 10018 stood at about 82,609 with "Fashion Industry" employment at approximately 27,652. This is presented in Exhibit 4.

The percentage of total employment that is fashion-related has declined from 48.6% to 33.5% since 1996. Declines within the apparel industry were consistent in the Textile and Apparel Manufacturing sectors, and to a lesser extent within the Wholesale Apparel sector. The Services sector, particularly Business Services, plays a more important role and now represents over 33.1% of the total employment. The retail sector has been steady and represents over 8.9% of the area's employment. All of this is in line with the anecdotal evidence within the real estate community, which sees an ever-growing office sector that is unrelated to the Fashion Trades.

This is evident from the chart in Exhibit 4. This measures the percentage change in total non-agricultural, private sector employment and manufacturing employment in the primary Fashion Center BID Zip Code (10018). As can be seen the total private sector employment has consistently out-performed the manufacturing sector. This indicates the diminishing importance of the manufacturing sector in the BID. At present, there does not appear to be a significant presence of any particular industry other than the garment industry. While its presence is diminishing it still represents a significant industry group in the district.

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