Institutional construction spending in New York City continues to shrink and stifle builders, according to a report released today by the New York Building Congress that analyzed McGraw-Hill data. The city’s private and public institutions embarked on $704 million worth of construction projects in the first six months of 2012, down 41 percent from the $1.2 billion spent over the same period a year ago. NYBC noted a continued downward trend, as institutional construction starts totaled $3.8 billion for all of 2009, $2.9 billion in 2010 and $2.4 billion last year. This year’s pace is just $1.4 billion.
As The Real Deal previously reported, overall New York City construction starts fell 31 percent in 2011 and as a result the city’s building industry employed fewer people in the first quarter of 2012 than it has at any point in the last 13 years.
Much of the decline in institutional spending is due to a sharp drop in spending by public elementary and secondary schools. The value of their new construction projects fell by 62 percent annually in the first six months of the year to just $169 million. These institutions have led institutional spending in recent years, accounting for 37 percent of all value over the last four years. On the other hand, hospital and health care construction starts, which historically has accounted for 26 percent of outlays, grew 19.2 percent to $273 million.
The NYBC noted that with large construction projects on the docket for Columbia Unviersity’s Manhattanville expansion, New York University’s expansion, the CornellNYC Tech school slated for Roosevelt Island and the City University of New York’s $2.1 billion worth of construction plans over the next five years, spending on higher education will be a boon to builders.
“These are truly exciting times for New York’s colleges and universities,” said NYBC President Richard Anderson. “The determination of these institutions to build for the future is critical to our industry and the City. In the short-run, these projects mean construction jobs and economic activity. In the long-run, they expand the collective strength and contributions of the higher education sector as an economic engine of the New York City economy.” — Adam Fusfeld