What's shaping Long Island's $206 billion economy in 2025?

More uncertain than usual.

That’s how experts described the prospects for Long Island’s $206 billion economy in 2025.

While unemployment is near historic lows and wages are rising, they said a host of factors are driving uncertainty across Nassau and Suffolk counties, including the shortage of affordable homes, uneasy consumers, and the potential impacts of trade, immigration and tax changes coming from Washington.

Still, several of the region’s hospitals plan to open new or updated emergency departments. Employees will have paid prenatal leave for the first time. There will be more grocery stores to choose from and more apartment buildings, though not enough to meet demand.

“Housing is a constraint to growth,” said Richard Vogel, dean of Farmingdale State College’s business school. Young workers “can find employment but not housing that they can afford. That affects employers’ ability to meet the needs of customers, to grow their business,” he said.

Vogel and others predicted that Long Island’s economy  will grow at a slow but steady rate, similar to 2019 before the COVID-19 pandemic struck.

The gross domestic product — the sum of all goods and services produced in Nassau and Suffolk counties — is expected to climb between 1% and 2.5% compared with 2024, they said. The growth rate was 0.3% between 2022 and 2023, according to the most recent data from the federal Bureau of Economic Analysis.

Consumers are cautious about the economic outlook despite encouraging data: an unemployment rate of 3%, an inflation rate of about 4% and increased household income compared with 2023 on Long Island.

“There is this middle-income band [of people] who still feel things aren’t where they should be. They are a large group and their spending is constrained,” said Vogel, adding that consumer spending accounts for 70% of economic activity both locally and nationwide.

The policy priorities of the new administration of President Donald J. Trump are weighing on consumers and business owners.

“Widespread tariffs and deportations [of undocumented immigrants] would lead to high inflation and a stagnation in economic growth,” said John A. Rizzo, an economist and Stony Brook University professor. “But I think cooler heads will prevail so this will not occur.”

To better understand Long Island’s 2025 economic outlook, Newsday reporters took a closer look at key sectors shaping the region’s future — from real estate, technology and labor to health care, retail, manufacturing and more. Readers can dive deeper into each topic by clicking to expand the sections below. — James T. Madore

Will 2025 finally be the year Long Island home prices flatten or fall?

Don’t count on it, said Jonathan Miller, a Manhattan-based appraiser who publishes quarterly home sales reports with brokerage Douglas Elliman.

Miller projects that the median price of homes on Long Island, excluding the East End, will rise by 4% to 5% in 2025. While that marks a slowdown from the rapid increases of recent years, it would still keep deals out of reach for many first-time homebuyers.

The issue boils down to housing supply of available housing, Miller said, adding that he sees little evidence that the number of homes for sale on Long Island will rise substantially in 2025 . In October, the number of homes for sale was about half what it was in October 2019, before the pandemic.

“Inventory is still going to be a problem on Long Island, as well as the East End, and that is going to keep housing prices higher or probably make them rise further — maybe not as much as they’ve risen in the last couple of years,” Miller said.

A hoped-for drop in mortgage rates also seems less likely as 2024 ends . Policymakers at the Federal Reserve signaled earlier this month they expect to cut short-term interest rates only twice next year, which means homebuyers won’t be able to count on relief in interest costs either.

Predictions for the average 30-year fixed mortgage rate next year range from “near 6%,” according to Lawrence Yun, chief economist at the National Association of Realtors, to a projected 6.8% from economists at the national brokerage Redfin.

The wide range of projections reflects economists’ varying views on how President Donald Trump’s economic policies may affect inflation, said Richard Haggerty, CEO of OneKey MLS, the multiple listing service that covers Long Island. He’s optimistic that more houses may become available next year regardless of what happens with rates.

“There does reach a point where sellers just have to sell because of life decisions,” he said.

Mortgage rates tend to rise during inflationary periods and fall when there is greater fear of recession.

For renters, fewer new apartments expected next year mean landlords should have the ability to raise rents, said Mateusz Wnek, associate director of market analytics at CoStar, which publishes commercial real estate data. Its data includes professionally managed buildings but not affordable housing and house rentals.

He said rent growth will peak at 5% during 2025 as demand for apartment increases. Marketwide, average rent growth had stayed below 2% since the third quarter of 2023, according to CoStar.

That will provide “a backdrop for landlords to raise rents next year,” Wnek said. — Jonathan LaMantia

New and updated emergency departments across Long Island are set to open in 2025 as hospitals work to meet increasing demand for services, particularly on the East End.

The Stony Brook East Hampton Emergency Department, a 22,000-square-foot stand-alone facility, will feature exam rooms with cardiac monitoring capabilities, a resuscitation room, and MRI, CT, ultrasound and X-ray equipment. As part of Stony Brook Medicine, the center is affiliated with nearby Stony Brook Southampton Hospital and slated to open in the spring.

In Port Jefferson, Mather Hospital is doubling the size of its emergency department to 26,000 square feet. Officials from Northwell Health said the expanded department will offer more space and privacy for patients and their caregivers, as well as a dedicated section for mental health crisis care. Mather’s emergency department treats almost 40,000 patients a year. The project will also include a helipad atop the hospital for emergency transfers.

LIJ Valley Stream’s emergency department has undergone a significant expansion and overhaul, with the updated 12,000-square-foot facility set to open in 2025. The redesign will allow the department to handle 55,000 patients a year, up from about 40,000.

Good Samaritan University Hospital’s busy emergency department, which treats almost 90,000 patients a year, is getting a redesign as part of its new 300,000-square-foot Patient Care Pavilion. Officials from Catholic Health said the six-story structure will feature a larger surgical suite with private pre- and post-surgery rooms, along with 36 single rooms in a private surgical unit. These rooms will feature private baths, showers and family video-conferencing capabilities.

The upgraded emergency department will include 75 private bays and do a better job separating the pediatric and adult waiting and treatment areas.

Northwell Health is ready to open a larger facility in Yaphank, where a GoHealth urgent care clinic is currently located in a retail, office and residential complex called The Boulevard. Expanded services include dental, pediatrics, imaging, orthopedics, pain management and physical therapy.

Catholic Health is using $800,000 in grant funds  from the Mother Cabrini Health Foundation to expand dental services at the Stephen B. Gold Clinic at St. Charles Hospital in Port Jefferson. The program, which focuses on underserved adults and children, recently hosted a clinic day forveterans. It treated 25 patients, providing more than $12,000 in free dental care. — Lisa L. Colangelo

New York State’s vision for an emission-free energy grid moved closer to reality in 2024 with the completion of the state’s first offshore wind farm, serving the South Fork of Long Island, and the ongoing construction of another large wind farm in Brookhaven Town.

But big questions loom for green energy in 2025, particularly with President-elect Donald J. Trump’s public opposition to offshore wind.

Meanwhile, dozens of battery projects proposed for Long Island and across the state face mounting opposition from residents concerned about a repeat of the 2023 battery fire in East Hampton. Moratoriums on battery projects declared by most Long Island towns extend into 2025, but it’s uncertain whether they’ll be extended.

Antiquated fossil-fuel power plants, such as those in Island Park, Port Jefferson and Northport, as well as a newer natural gas plant in Yaphank, still provide the bulk of Long Island’s power. However, solar power is catching up: nearly one in ten customers now sport solar panels on their roofs, and utility-scale solar continue to grow.

The state’s green-power revolution is proving slower than anticipated, and 2025 may be the year that reveals just how long the transition will take. — Mark Harrington

Employers across the state will have to contend with a new form of paid leave starting Jan. 1, when the state’s first-in-the-nation requirement for paid prenatal leave goes into effect, said labor and employment attorney Jessica Baquet.

The new law requires private sector employers, regardless of size, to provide pregnant employees with up to 20 hours of paid leave specifically for prenatal healthcare. Employees must use the leave in 1-hour increments and can apply it to cover physical exams, procedures, testing and discussions with pregnancy-related health care providers.

This leave is in addition to normal paid sick leave.

“It’s a big change,” said Baquet, partner at Ruskin Moscou Faltischek, in Uniondale. “That’s one of the things that are top of mind for employers.

While other updates to workplace policies , including a minimum wage increase (Long Island’s minimum increases to $16.50 an hour) are set to take effect, prenatal paid leave represents “a type of leave that hasn’t existed before,” Baquet said.

Changes in the White House also pose major questions. Labor organizing faces many unknowns under the incoming Trump presidency, which could bring significant changes to the nation’s labor law enforcement agency, the National Labor Relations Board.

“What’s going to happen to these legal challenges to the NLRB?” said Mary Anne Trasciatti, director of labor studies at Hofstra University. “Because that’s about dismantling the regulatory state.”

Trasciatti said she anticipates continued “militancy” among labor organizers at businesses like Amazon and Starbucks and imagines that the federal government will be less supportive of the unions than the Biden administration. —Victor Ocasio

Long Island’s vibrant tech sector, powered by innovative startups, early-stage companies, and billion-dollar corporations, is set for major growth in 2025. Long a leader in biotech, financial technology, software development and medical devices, Long Island-based companies are also exploring emerging tech fields.

In 2025, the combination of artificial intelligence and financial technology will spark a “data-driven financial revolution,” according to Forbes. Long Island’s biggest fintech company is already at the forefront of this trend. Lake Success-based Broadridge Financial Solutions, which launched a ChatGPT-powered corporate bond program in 2023 ahead of many competitors, this month unveiled an AI-powered service for asset managers and hedge funds. The company says it is working on nearly 30 AI-based fintech projects for next year. Broadridge, which started in 1987 in the East Northport home of founder Richard Daly, has a stock market valuation of approximately $25 billion, the largest of any Long Island company. It employs 15,000 people globally, including about 2,500 on Long Island.

But innovative tech development isn’t limited to Long Island’s largest companies. Andrew Wooten, executive director of the Long Island High Technology Incubator (LIHTI), a nonprofit organization affiliated with Stony Brook University, said there is “a strong pipeline” of new companies focused on artificial intelligence, information technology, and green energy.

In October, LIHTI hosted its first Venture Champions Challenge, where 12 startups presented their business models to a panel of judges. Winners received mentorship and financial support at the incubator. Notable winners included CurrentEdge Power Semiconductor, which develops power modules for high-energy applications, and 12bit AI, whose artificial intelligence model generates synthetic medical images to help improve the diagnostic capabilities of other AI systems.

Nationally, hiring for tech jobs is expected to outpace most other sectors in 2025, according to the Computing Technology Industry Association. However, attracting tech companies—and workers—to Nassau and Suffolk has sometimes been difficult due to the region’s high cost of living. Wooten, however, said Long Island’s advantages outweigh its challenges.

“Long Island offers a strong foundation of basic research, attractive economic incentives, a highly qualified STEM workforce, and a great overall quality of life for its residents,” he said. — Peter King

Major retail changes on Long Island in 2025 will include the arrival of several new supermarkets, as competition in the grocery sector continues to heat up. 

Rochester-based grocer Wegmans will open its first supermarket on Long Island on Feb. 26 in Lake Grove. 

By the end of the summer, German discount grocer Aldi will have added three more Long Island locations — in Medford, Bethpage and Lake Ronkonkoma — bringing its total to 18 stores on the Island.

Uncle Giuseppe’s Marketplace, a Melville-based specialty Italian grocer with 11 supermarkets in New York and New Jersey, plans to open a store in Bohemia in late 2025.

Despite Long Island’s expensive retail space leasing costs and  limited real estate, the region remains attractive togrocers, particularly large chains, due to its dense population, high household incomes, a large percentage of college-educated residents and high homeownership rate, said Jeff Metzger, publisher of Food Trade News, a Columbia, Maryland-based publication.

Nationwide, consumers’ ongoing concerns about inflation could worsen  in 2025 due to tariffs that President-elect Donald Trump has promised to enact during his second administration, retail experts said.

In November, Trump posted on this Truth Social platform that on Jan. 20, the first day of his second presidential term, he would impose a 25% tariff on imports from Canada and Mexico and increase tariffs on Chinese imports by an additional 10%.

Such steep tariffs are unlikely to be implemented immediately, in part because of the closely interconnected supply chains between the U.S. and Canada, especially for the auto industry, said Michael Zdinak, director of the U.S. consumer markets service at S&P Global Market Intelligence, a Manhattan-based financial analysis firm.

S&P is forecasting that a more conservative 10% tariff  on imports from Canada and Mexico, which would still affect consumers’ wallets, he said.

“As long as the economy continues to hum along, a lot of those high prices for retailers will be passed on to consumers,” he said.— Tory N. Parrish

The Federal Reserve’s 2024 interest rate cuts, along with two more planned for 2025, bode well for small businesses, said Erica Chase-Gregory, director of the Small Business Development Center at Farmingdale State College.

“We’re seeing a lot of small businesses interested in applying for capital to infuse into their business or just new ventures starting,” she said.

About 60% of clients seeking services from the development center are looking to start new businesses, Chase-Gregory said. They could get support for their business operations from artificial intelligence; Chase-Gregory predicts small businesses will increase their use of generative AI in 2025. The Small Business Development Center in Farmingdale has been conducting AI training for small businesses focused on how the technology can help them increase productivity, improve marketing and handle other tasks.

Generative AI can learn from and mimic large amounts of data, and then, based on prompts, use that data to create content such as text, images, music, videos and code, according to Harvard University Information Technology. Among small businesses with fewer than 250 employees, 40% self-identified last summer as having used generative AI, up from 23% in 2023, according to a survey of 1,100 U.S. small businesses conducted by the U.S. Chamber of Commerce Technology Engagement Center in conjunction with Teneo Research.

Transit-oriented developments—projects near train or bus stations that include diverse housing options—are another benefit for small businesses on Long Island in 2025 and beyond, said Kyle Strober, executive director of the Association for a Better Long Island, an economic development and advocacy group in Hauppauge.

“When it comes to small businesses, they need a thriving community with a strong middle class that can afford to live in the community and support their businesses,” Strober said.

He cited several projects in Lynbrook, Baldwin, Patchogue, and elsewhere on Long Island as examples of planned or recently finished transit-oriented developments that will support small businesses.

One example is The Grand at Baldwin, construction of which will start in 2025 at the intersection of Sunrise Highway between Grand and Harrison Avenue, across the street from the Baldwin LIRR station. The development will include 215 upscale apartments and 5,000 square feet of ground-level commercial space, according to the developer, Breslin Realty Development Corp. in Garden City. — Tory N. Parrish

Concerns over the impact of potential tariffs are top of mind for some manufacturers on the Island who rely on global trade and distribution networks.

“We’re taking the potential threat of increased tariffs seriously as we do any issue, be it a port strike or anything else,” said Lee Pochter, CEO  of Qosina Corp.,  a Ronkonkoma-based distributor and manufacturer of medical components and disposable cosmetic products.

Pochter said his company  has diversified its suppliers, maintaining  five or six options for any given product they might  need. Post pandemic, he said, it’s crucial  for clients to know there are plans in place if supply lines are disrupted.

“We’re always building contingency plans.” Pochter said. “A part of any company’s standard supply chain mitigation is having backups for backups for backups.”

For Dorith Hakim, CEO of CPI Aerostructures Inc., tariffs are less of a pressing concern. The defense manufacturer doesn’t rely on goods or supplies from overseas.

“We don’t import," Hakim said. "Everything that we purchase is domestic to the U.S. because we’re 98% military defense, so we have years and years of an established supply base.”

A bigger challenge for manufacturers in 2025, Hakim said,  will be ensuring there are enough workers to  fill manufacturing jobs and that local academic institutions are prepared to train job seekers with the skills Long Island businesses need. 

“What is really needed is a stronger linkage between academic and industry needs,” she said. “I’m not saying there isn’t a linkage, but it needs to be stronger.” — Victor Ocasio