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Construction Spending in NYC: Returning to Boom Era

Construction spending in NYC is estimated to reach $32.9B in 2014, representing a 17% increase over 2013. Residential projects are projected to reach $10.9B, while non-residential is expected to level off at $7.8B. Government spending is also expected to increase marginally. By 2016, construction spending is expected to top $35B.

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Construction Spending in NYC: Returning to Boom Era

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  1. Richard T. Anderson President, New York Building Congress

  2. 2014 Construction Spending RETURNING TO BOOM ERA • Overall spending estimated to reach $32.9B. • — Represents 17% increase over 2013 spending. • — Tops 2007 peak in current spending, before adjusting for inflation. • Residential projected to reach $10.9B, up from • $6.8B in 2013. • Non-residential likely to level off at $7.8B, down from $8.0B in 2013. • Government expected to increase marginally to $14.3B from $13.4B in 2013.

  3. 2016 Construction Spending TO TOP $35B

  4. GOVERNMENT CONSTRUCTION • Largest source of construction activity in NYC over the past 20 years. • Downward investment trend since 2008 peak. • Slight upturn to $14.3B expected in 2014. • Spending expected to drop back to $13.3B in 2015 and $13.6B in 2016.

  5. PUBLIC INFRASTRUCTURE

  6. NYC GOVERNMENT CONSTRUCTION EXPENDITURES IN 2013 AND 2O14 • City construction spending expected to rise to $7.5B in 2014, after dropping to $7.2B in 2013. • Environmental and Justice outlays declined while other major sectors rose. • Priorities shifting to City Operations, Education, and Transportation. • City’s increasing debt may limit future resources for capital investment in all areas.

  7. INSIDE THE NUMBERS • The City's construction market has rebounded nicely since the 2008 recession thanks to an improving economy, increased foreign investment, and continued progress on major public and private sector initiatives. • The completion of professional sports and entertainment venues contributed to the 2014 decrease in non-residential construction, but it is not expected to negatively impact the strong forecast for 2015 and 2016. • Recent declines in government spending have been offset by renewed strength in private sector construction. • The overall health of the City’s construction industry remains dependent upon government work. • Infrastructure spending on system expansions, new repairs, and upgrades is essential for economic development.

  8. RECOMMENDATIONS • Increase development of new housing at multiple price points, focusing attention on strategic rezonings, stalled construction sites, and streamlining regulatory requirements and processes. • Identify new sources of dedicated revenue to help fund the MTA’s next five-year capital plan, including removing exemptions to the regional Payroll Mobility Tax. • Promote innovation and adopt best practices throughout the industry and in government to build smarter, faster, more safely, and more economically. • Prepare for future economic growth through rezonings, balanced landmarking, incentives, and streetscape investments that encourage further development in areas throughout the five boroughs. • Ensure that Superstorm Sandy federal relief funding is put to quick and productive use in rebuilding storm-damaged neighborhoods and fortifying vital infrastructure.

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