While the New York City construction industry has been stable in 2011, drastic job and spending cuts are in the cards for 2013, according to a report released today by the New York Building Congress entitled “New York City Construction Outlook 2011-2013.”
Construction spending is expected to total $27.7 billion this year, just shy of the $28 billion spent in 2010, but 11 percent below the $31 billion peak in 2007. The Building Congress expects spending to be about the same in 2012, before plummeting to $23 billion in 2013.
Similarly, the average number of construction jobs will fall by 4,900 this year to 106,900. And after a 5,200 uptick in construction jobs next year, the Building Congress expects the number of jobs to plummet to 91,800, down 40,000 from the 2008 peak.
Much of these declines come from the drop in expected government contracts, the number one driver of the city’s construction industry, over the coming years. Total government spending was $16.1 billion in 2010, but will fall to $14.4 billion this year, and then $12.7 billion and $9.6 billion over the next two years. The Metropolitan Transportation Authority alone will cut spending from $5.5 billion this year and next to $2.4 billion in 2013.
“As city and state governments face growing deficits and with the federal government focused on debt reduction,” said Building Congress Chairman Peter Marchetto, “it looks increasingly likely that our industry will need the private sector to pick up the slack, if we are to maintain a stable construction market in the coming years.”
According to the report, non-residential construction will remain relatively steady in the coming years, but as the World Trade Center, Madison Square Garden and Barclays Center wrap up construction, the sector could be headed for a nosedive unless the economy improves.
Finally, 2010 will prove to be the year construction bottomed for the residential sector, the report said, as total spending will rise steadily from $2.3 billion last year to $3.5 billion in 2013. — Adam Fusfeld