The construction industry in New York City generated $66.3 billion last year, thanks in large part to a record amount of spending.
A new report by the New York Building Congress adjusts 2016’s total construction spending to $42.4 billion, slightly lower than earlier projections of $43 billion. Still, the figure represents the first time in the city’s history that spending crossed the $40 billion threshold. A majority of this spending — $17.1 billion — was in non-residential construction, which includes office, institutional and hotel projects. Government construction followed with $12.7 billion and then residential with $12.6 billion, according to the report.
The total economic impact is up from 2015, when the industry generated $64.9 billion, and in 2014, when it generated $51.5 billion.
“The bottom line is, the construction industry is on fire,” Carlo Scissura, president of the Building Congress, told The Real Deal on Monday.
But another report released last week highlights the downside of a bustling construction industry. In its annual international construction report, Turner & Townsend noted that the city is one of 24 it classifies as “overstretched” due to high construction and labor costs. The report estimated the average cost of construction to be $354 per square foot, and the average hourly wage for construction workers to be just under $100. The report estimates that construction costs will increase by 3.5 percent in 2017.
Scissura noted that construction has had a “ripple effect” on other industries. The Building Congress estimates that $12.1 billion of 2016’s total construction-related economic output can be attributed to income produced by industry-related services, like those provided by architectural, engineering and legal firms. Another $11.8 billion can be pinned to the “induced impact of construction,” which is indirect spending by construction workers on things like transportation, food, clothing and other “local consumer” products.
(To view a list of contractors in TRData’s companies database, click here)