New York City saw a dramatic drop in business activity last spring, as roughly 8,400 establishments closed in the second quarter of 2025, according to the Economic Development Corporation (EDC) latest report. About 3,500 new businesses opened during the same period.
The closures were most pronounced in Manhattan’s Midtown and Financial District, areas directly affected by congestion pricing, which requires drivers to pay an additional $9 toll to enter south of 68th Street. Analysts note that this new policy has contributed significantly to the decline in business activity in these commercial hubs.
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Small-business owners outside Manhattan have also faced pressures from federal tariffs, which raised the cost of imported goods. The New York Times reported, Eric Stechler, owner of Corner Furniture in the Bronx, said his family-run store, operating for more than five decades, would soon close. He noted that he did not want “25 employees to have to look for new jobs,” as rising costs and reduced demand made continuing the business unsustainable. Some items at the store had to be raised by as much as 50 percent to cover the impact of tariffs.
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The broader economic picture in the city reflects a slowdown in job growth. Private-sector employment rose by only 18,600 jobs through November 2025, down from nearly 89,000 over the same period the previous year. The unemployment rate increased slightly to 5.5%, while labor force participation reached a record 62.4%.
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The EDC report underscores the hurdles facing small businesses as they navigate new costs, shifting consumer patterns, and evolving economic policies. The agency’s analysis offers a detailed look at the forces reshaping the city’s commercial landscape.
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