LI economy rebounded in 2021 from COVID-19 recession, data show

Long Island’s economy bounced back last year from the 2020 coronavirus-induced recession, new data show.

Nassau County’s gross domestic product, the sum of all goods and services produced, totaled $89.7 billion in 2021, according to the federal Bureau of Economic Analysis. That’s a 6.3% increase from the previous year.

Suffolk County’s GDP totaled $90 billion last year, up 5.1% from 2020.

Economic activity had contracted in spring and summer 2020 when businesses were shut down for months to slow the spread of COVID-19. GDP dropped more than 5% in Nassau and 4% in Suffolk compared with 2019, based on the bureau's revised estimates.

Those declines were reversed last year, with the size of each county’s economy exceeding its pre-pandemic level ever so slightly.

“We may have dug ourselves out of the hole, but we have to remember that GDP would likely have been even higher if the pandemic hadn’t occurred,” said John A. Rizzo, an economist and Stony Brook University professor.

“It’s not like we’ve completely removed the damage from the pandemic; there is lost opportunity," he said. Without the pandemic, "there would have been more [business] investment and less inflation than what we have right now.”

Rizzo on Friday blamed federal COVID-relief programs for boosting consumer purchases, which led to product shortages and price hikes this year.

He also attributed Nassau’s strong growth between 2020 and 2021 to an influx of New York City residents and businesses that decamped during the pandemic’s worst days. The county’s GDP grew faster than the state and nation, while Suffolk’s growth lagged. 

New York State’s economy totaled $1.5 trillion last year, an increase of 5.7% from 2020. The U.S. economy totaled $19.4 trillion, a gain of 5.9%, the bureau reported.

“There was a nice recovery on Long Island,” Rizzo said. “But I think 2022 will be less promising because of inflation and rising interest rates,” both of which dampen spending by consumers and businesses “and by design slow the economy.”

In terms of the 2021 recovery, two sectors — entertainment/recreation and hotels/restaurants — expanded the most after contracting the most in 2020, according to a Newsday analysis of the data.

Entertainment/recreation totaled $1.3 billion in Nassau and $547 million in Suffolk, or an increase of 54% and 36%, respectively, over 2020.

Hotels/restaurants totaled $1.95 billion in Nassau and $2.1 billion in Suffolk, or a gain of 33% and 30%, respectively.

The data showing the comeback of performing arts centers, concert halls, art museums and recreation centers didn’t surprise Lauren Wagner, executive director of the Long Island Arts Alliance, which represents more than 100 arts and cultural organizations.

“When you stifle the arts, put a blanket over that activity [with the 2020 shutdown], it has a significant effect — and not just on the arts,” she said, adding that bars, restaurants and retail shops benefit from audience spending on performance days.

Wagner and others said the entertainment/recreation sector “tested the waters” in early 2021 and by Jan. 1, 2022, programming was 75% to 80% of its pre-pandemic level. “That had a huge impact,” Wagner said.

Mario Saccente, president of the Long Island chapter of the New York State Restaurant Association, credited the industry’s resurgence to increased to-go orders, widespread use of outdoor dining and the purchase of personal protective equipment for diners and waiters.

“Restaurants adapted the way they do business to make the public feel safe to come out again,” he said.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.