Contact: Cathy DelliCarpini-Kruse (212) 481-9230
Contact: Bud Perrone (212) 843-8068
NEW YORK, January 8, 2003 – Total construction spending in New York City is estimated to have reached $15.3 billion in 2002, down $600 million from a record-breaking total in 2001, according to Construction Outlook 2002-2005, a report issued by the New York Building Congress. This level of construction far exceeds citywide construction levels during the mid- to late-1990’s, when annual spending was calculated in the $10 billion range.
The Building Congress report, based on an analysis of capital budgets, private sector development plans and other indicators, forecasts construction spending will remain essentially flat in 2003 ($15.5 billion) and 2004 ($15.3 billion), before rising to $17.8 billion in 2005. The report cautions, however, that there is considerable uncertainty given current market forces and State and City budget gaps.
“Despite a weakening economy, growing deficits and uncertainty stemming from the 2001 terrorist attack, construction spending and employment have held up remarkably well,” said Building Congress Chairman Marilyn Jordan Taylor. “Our analysis of future construction plans indicates continued opportunity for the industry, and there seems to be the political will to press ahead with vital projects. The big question regarding public and private sector work, however, is the availability of financing necessary to move projects from planning to construction.”
Building Congress President Richard T. Anderson added, “The current level of uncertainty is heightened by a slowing trend in the design sector, the first stage in the construction process, and less than full employment in the construction trades. While the slowdown may simply represent an easing off of what was a breathless pace over the past three to four years, a prolonged or deepened slump in these areas could spell trouble for certain industry sectors in the years ahead.”
According to the Building Congress, construction industry employment is estimated at approximately 123,000 in 2002, which is down slightly from 2001 when the City reached a record level of 124,800 workers. Total construction-related employment was 90,200 in 1995 and has risen steadily since, topping 100,000 for the first time in 1998. Employment levels are expected to stay above 120,000 over the next three years.
In preparing Construction Outlook, the Building Congress divided activity into three components: residential, non-residential and public construction. Residential construction spending in New York City is expected to have reached $1.7 billion (12,300 units) in 2002. While 25 percent less than a year ago, this level of spending is still more than twice that of 1995 (5,135 units). Looking ahead, residential construction is expected to remain in the $1.7-1.8 billion range (approximately 12,000 units per year) through 2005.
Non-residential construction -- including private commercial and institutional development -- is estimated at $4.3 billion in 2002 (13.5 million sq. ft.), a slight drop from 2001 ($4.6 billion/14.4 million sq. ft.) Again, activity levels remain well ahead of the mid-1990s ($2.75 billion/5.4 million-sq. ft. in 1995). Construction in this sector is expected to change little in 2003 ($4.3 billion/13.5 million-sq. ft.) and dip in 2004 ($3.4 billion/10.6 million sq. ft). A return to current levels is forecasted for 2005 ($4.2 billion/13.3 million sq. ft.).
Public construction -- new construction as well as repair and maintenance of infrastructure, educational facilities and transportation networks – is estimated to have totaled $9.1 billion in 2002; up from $8.9 billion in 2001. From 1995-1999, public construction spending ranged just $5.4-$6.5 billion. The Building Congress analysis indicates total infrastructure spending will remain at $9.0 billion in 2003; rise to $9.7 billion in 2004 and reach $11.0 billion in 2005.
Construction Outlook analyzes the impact of future construction in Lower Manhattan; however, the report’s figures do not include potential activity related to rebuilding on the World Trade Center site. While replacing up to 11 million square feet of commercial and retail space will greatly increase overall building activity, the bulk of such work is not likely to proceed earlier than 2005.
Construction Outlook was prepared by the New York Building Congress with the assistance of Urbanomics, an economic consulting firm, and includes reviews of private construction data as well as public capital budgets and plans at the City, State and Federal levels.
The full report can be viewed at www.buildingcongress.com/code/outlook/2005-outlook.htm.
The New York Building Congress is a membership coalition of business, labor, association and government organizations promoting the design, construction and real estate industry in New York City.
