Thanks to an increase in demand for luxury housing, and an upswing in non-residential activity and government spending, the group predicts a 9 percent year-over-year increase in overall construction spending to $30.7 billion this year, from $28 billion last year. And thanks to an increase in activity across all sectors, spending has climbed 22 percent since falling to a post-recession low of $25.2 billion in 2010. The activity will hold steady next year, the group expects, with a forecasted total of $30.2 billion spent in 2013. Construction activity is predicted to total $29.1 billion in 2014, the report says.
As The Real Deal previously reported, around $6.6 billion of construction projects began in the city during the first half of this year, which marked a 16 percent decline from the same period last year.
Spending on non-residential projects, such as offices, hotels and entertainment venues, is expected to reach $12.6 billion — an all-time high — this year. Last year that amount was $10.5 billion. The increase is attributable to construction at the Barclays Center and the World Trade Center. However, as non-residential projects around the city come to a close, the Building Congress expects a sharp decline — to $8.8 billion in 2014, from $11.1 billion in 2013. Even this year, the group forecasts a slight decline in construction employment to 110,800 jobs, from 111,500 last year.
But the report highlights activity in the residential sector — primarily due to growth in the luxury market in combination with banks’ increased willingness to provide financing. Total residential construction spending this year is expected to reach $3.2 billion, up from $2.9 billion last year. But the residential sector is still projected to grow: to $4.2 billion in spending in 2013 and $5.3 billion in 2014. Despite the numbers, this level remains below the 2006 and 2007 peaks, which eclipsed $6 billion. — Zachary Kussin