The number of businesses in New York City plummeted by nearly 5,000 last spring, according to new data, the sharpest decline since the coronavirus pandemic brought the local economy to a standstill in early 2020.
While more than 3,500 businesses were started in the second quarter of 2025 — the most recent period for which data is available — an estimated 8,400 closed their doors during that time, the city’s Economic Development Corporation said in a report released on Thursday. That net decline wiped out nearly all of the city’s gains in start-up activity since 2022,the agency’s data showed.
The slowdown in business formation is the latest sign that the New York City economy, after a slow and rocky rebound from the pandemic, has softened. The city’s labor market also deteriorated last year: Private firms added just 18,500 jobs through November, down from nearly 90,000 the year before, according to the city.
“We were exhibiting stronger growth in 2024 compared to the nation, so to see this dip back down, it means that there’s been some shocks that businesses are experiencing,” said Lauren Melodia, the director of economic and fiscal policy at the Center for New York City Affairs at the New School. “Owners are really not feeling strong and certain about the future of the economy.”
The report by the Economic Development Corporation illustrates the challenges ahead for Mayor Zohran Mamdani, who has pledged to address the financial hardships of New Yorkers, as the trajectory of the city’s economy has shifted over the past year in response to President Trump’s tariffs and other policies. This week, Mr. Mamdani signed an executive order aimed at supporting small businesses by reducing the fines and fees that cut into their bottom lines.
The agency’s analysis captured a period right after the Trump administration announced sweeping tariffs and businesses were starting to face higher bills for goods. The drop-off in business activity occurred across the city but was most pronounced in its major commercial districts, including Midtown Manhattan and the financial district, the report said.
Business closings were elevated in large white-collar industries like information, which includes the rapidly changing media and technology sector, and professional services, which includes accounting and bookkeeping.
Despite the warning signs, the report noted that the city and the metropolitan area had recently fared better than anywhere else in the United States. Job growth in the region between November 2024 and November 2025 was double that of the second-highest-growth area, Philadelphia. And unlike many American downtowns, demand for office space in New York has surged, climbing last year to the highest level since 2019, though the city’s vacancy rate is still higher than it was before the pandemic.
But it is a different story for some small-business owners, who say they are being battered from all sides as they face higher rents, rising prices from tariffs and manufacturing costs, and shifts in consumer spending since the pandemic.
Corner Furniture, a store in the Bronx, is shutting down in a few weeks after being open for more than 50 years. Sales last year plunged nearly 60 percent from a record high right before the pandemic, said Eric Stechler, the owner.
He said there were several reasons for the sharp decline. The company had to raise prices last year by up to 50 percent on some items to cover the cost of tariffs, and overall demand collapsed after so many people bought new furniture during the pandemic.
“We held on a lot longer than we should have,” Mr. Stechler said, “but you don’t want a family business to close, and I don’t want to see 25 employees have to look for new jobs.”
Kirsten Noyes contributed research.
Matthew Haag is a Times reporter covering the New York City economy and the intersection of real estate and politics in the region.
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