Construction costs on the rise in NYC

After declining in 2009, construction spending in New York City remains above $20 billion a year, with costs increasing modestly this year, according to a review of multiple indexes released today by the New York Building Congress. Increases in construction costs ranged from .8 percent to 4.9 percent for the first three quarters of 2010, compared to a nationwide increase of .1 percent to 7.2 percent. But these increases have been caused more by changes in commodity prices like diesel fuel, copper, aluminum and steel rather than by wage increases, the report says. Construction firm executives said that although activity for interior office renovations was up this year, they don’t expect much business from new residential or commercial development in the next year or two, The Real Deal reported in August.
“The good news is that New York City is in no way experiencing the relentless rate of cost escalation experienced during the boom,” said Richard Anderson, president of the New York Building Congress. “The bad news is that, depending upon which index you use, New York has given back most, if not all, of the cost declines we experienced in 2009.” The report also shows that New York City fared well in overall construction costs, with Class A office space construction at $288 per square foot, compared to $418 per square foot in London, its biggest international competitor. TRD