Oct. 26 (Bloomberg) -- New York City construction spending will hold steady through next year before a plunge that may send the industry’s employment to the lowest level since 1996, according to study by the New York Building Congress.
Spending will be $27.3 billion in 2012 compared with an estimate of $27.7 billion for 2011, the trade association said in a report today. It will fall to $23 billion in 2013, with average employment down 14 percent from this year to 91,800 jobs, according to the group.
The decline reflects a projected drop in building for bridges, roads, schools, mass transit and other public infrastructure, the Building Congress said. Spending by the city, the largest purchaser of construction work, probably will fall 45 percent between 2010 and 2012, according to the report. The Metropolitan Transit Authority, operator of the subway system, may decrease spending “dramatically” in two years.
The numbers “illustrate quite vividly the real-life implications of the economic downturn on New York City,” Building Congress President Richard Anderson said in a statement. “As bad as job losses have been to date, 2013 could be a painful year for a lot of local families.”
New York is already expecting its economy to be weakened by job losses in the financial-services industry. Wall Street may lose almost 10,000 jobs by the end of 2012, state Comptroller Thomas DiNapoli said on Oct. 11. That industry is “critically important to the economies of New York state and New York City,” he said in a report.
Drop From Peak
Construction employment is down 19 percent from its peak of 132,600 jobs in 2008, according to the Building Congress. The projections for 2013 would mark the first time since 1998 that there have been fewer than 100,000 jobs.
Government spending on construction is likely to decline to $9.6 billion in 2013 from $14.4 billion this year and $16.1 billion in 2010, the Building Congress said. Non-residential construction, including the Barclays Center sports arena in Brooklyn and downtown Manhattan’s 1 World Trade Center office tower, should top $10 billion this year and next, a first for this sector, the Building Congress said. Boston Properties Inc., the biggest U.S. office real estate investment trust, is starting a skyscraper on Manhattan’s West 55th Street as well.
“The big questions is what happens starting in 2013, when many of these mega-projects are at or nearing completion,” said the group, which represents New York’s construction industry and unions.
About 20 million square feet (1.9 million square meters) of additional office construction is “shovel-ready,” including Related Co.’s Hudson Yards project and other developments at the trade center site. Those projects could move forward during 2012 and 2013, the group said.
Residential development probably will rise to 11,500 units by 2013 from 10,700 this year, a “considerable improvement” over 2009 and 2010, when about 13,000 units were built in the two years combined, according to the Building Congress. The projection includes Extell Development Co.’s 90-story One57 project on West 57th Street, a hotel and condominium project across the street from Carnegie Hall.
--Editor: Kara Wetzel
-0- Oct/25/2011 21:18 GMT
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To contact the editor responsible for this story: Kara Wetzel at email@example.com -0- Oct/25/2011 19:12 GMT