A successful decade for nyc construction industry concludes with $26.7 billion in annual spending, according to new york building congress
Published May 2010
Despite two recessions and the upheavals associated with 9/11 and the financial meltdown, the first decade of the 21st Century was one of tremendous productivity for the City’s construction industry, according to an analysis conducted by the New York Building Congress.
Decade in Review
While the decade began with annual construction spending in the $14 billion range, it concluded with spending north of $25 billion per year. In fact, construction spending jumped from $79 billion in the first half of the decade to $134 billion over the decade’s final five years.
Construction employment ranged from a low of 111,700 in 2004 to a peak of 131,400 in 2008. Despite these fluctuations, the decade ended right where it began with annual employment estimated at 120,400 jobs.
Infrastructure spending by government entities steadily increased throughout the decade, from $7.9 billion in 2000 to $15.5 billion last year. For the ten years, government infrastructure work represented slightly more than 50 percent of all construction spending in the five boroughs.
Non-residential construction spending averaged $4.3 billion per year between 2000 and 2006 before rocketing up to $8.5 billion annually over the last four years of the decade. This rapid rise was due in large part to a renewed market for new office space, construction of two major stadiums and a burst of new capital spending by private institutions.
The Building Congress has long maintained that New York City must produce 20,000 units of housing each year in order to keep pace with population growth and to replace aging units. In this respect, the past decade was a major success, as the City averaged approximately 23,000 units annually, thanks to a major residential building boom during the latter half of the decade. As has been well-documented in recent Building Congress reports, however, the pace of new residential construction has slowed dramatically since 2008.
2009 in Review
Overall New York City construction spending reached $26.7 billion in 2009. While down eight percent from 2008, this level of spending still represented the third best year recorded over the past decade.
Construction employment reached 120,400 jobs in 2009 (down 8.4 percent), which is tied for the fourth highest annual jobs total for the decade.
Public sector construction accounted for 58 percent of all spending Citywide. Government spending, which includes expenditures by the City, State and Federal governments, as well as regional bodies, such as the Port Authority of New York & New Jersey and the Metropolitan Transportation Authority, rose by less than one percent to $15.5 billion. This is the highest level of annual spending in this sector for the decade.
Non-residential construction, including office space, institutional development and sports/entertainment venues, reached $8.7 billion, up from $7.4 billion in 2008. This level of spending is more than triple the amount of 2003, when annual non-residential spending stood at $3.1 billion. That level of annual spending is the second highest of the decade, behind 2007, when the sector accounted for $9.1 billion in construction spending.
The entire decline in 2009 resulted from a precipitous drop in the residential construction sector. Residential construction spending reached $2.5 billion, down from $6.3 billion in 2008. Similarly, the number of housing units produced dropped from 34,000 to 6,000 Citywide.
“The first decade of the 21st Century was an eventful one for the City and this industry,” said Building Congress President Richard T. Anderson. “In addition to record levels of spending and employment at the height of the building boom, we witnessed a series of notable building achievements, benefitted from a Mayoral administration willing to invest in the City’s future, and experienced a renewed focus on the importance of urban planning over the past ten years.”
Mr. Anderson added, “The industry’s short-term prospects are tenuous at present as a return to peak construction and employment is dependent upon the strength of the economic recovery and the ability of government to continue investing in the face of large deficits. However, to this point, government and institutional investment have held up and some major projects are moving forward. In addition, despite the recent building boom, any current oversupply of office and residential space may be short-lived.”
Charts and Diagrams
Source: FW Dodge, Public Capital Budgets/Plans, & Urbanomics
Source: New York State Department of Labor & Urbanomics
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