Slumping construction industry gets a boost from school expansions

As the demand for new hotels and condominium projects has weakened, New York City’s construction industry — which saw a modest increase in costs this year — is turning to the educational market for new opportunities. “Since the private market has declined so much for the past two years, it means the educational sector has grown as an overall percentage of the total market,” Richard Anderson, president of the New York Building Congress, told the Wall Street Journal. In 2008, the peak year, about $31 billion was spent on all construction activity in the city, $4 billion of which was dedicated to public schools and private institutions, Anderson said. In 2009, education construction accounted for $4.4 billion of the $27 billion in construction activity. So far in 2010, the overall market has decreased to about $25 billion, with about $5 billion being spent on school construction, Anderson estimated. But the future is uncertain for the education market, as government revenues are dwindling and private endowments are shrinking. “Our fear is that educational construction may not continue at the current level,” Anderson said. [WSJ]