Construction spending in New York on the rise once again
October 19, 2012
The Empire City is the site of thousands of businesses and millions of residences where construction is a daily occurrence; however, the economy has slowed down the amount of new buildings going up in New York City. But things may be turning around, as a recent report from the New York Building Congress has found construction spending in the city is expected to increase roughly 9 percent from the previous year.
"The city's construction industry has experienced a swift and rather remarkable resurgence. From the recently topped out 1 World Trade Center to the Second Avenue subway below, New York's private and public sector is investing heavily in its future," said Richard Anderson, president of the NYBC.
What are the reasons for growth?
According to the report, increasing demand for luxury housing, continued work at the site of the World Trade Center and higher levels of investment in the city are driving the growth of the construction industry in New York City. In fact, this is the first time construction spending is expected to reach more than $30 billion since 2008. Through investments in software solutions such as scheduling tools, construction firms will be able to manage their projects during the year.
Some of the most expansive gains in the construction industry are taking place in non-residential construction. The report found office space, institutional development, sports/entertainment venues and even hotels are the source of large amounts of investments - $12.6 billion in 2012, to be exact - which is expected to be the highest number in the upcoming years.
"Right now, there are approximately 20 million square feet of new office towers that are shovel-ready and can move forward once the economy can support them," said Anderson. "In addition, universities, cultural organizations, healthcare facilities and other New York City institutions are continuing to invest in the future."
How is the government playing a role?
Mass transit, public schools, roads, bridges and other essential infrastructure are handled by government spending, and its investments in construction are expected to remain constant in the next few years. However, the Metropolitan Transportation Authority is not reaching it peak of spending, as it has in recent years.
"Looking ahead, we are concerned about the prospect of declining government investment beyond the forecast period," said Anderson. "The City's Office of Management and Budget is currently projecting that construction and design commitments will be cut in half between the current Fiscal year and fiscal 2015."