WILL THE NEW YORK CITY CONSTRUCTION BOOM CONTINUE IN 2020?
It would appear that the members of the STA should expect to experience a solid construction market as we enter the new decade of the 2020’s.
Barring a national economic calamity, construction in New York City is expected to continue to thrive at unprecedented levels over the next few years.
According to a recent report by the New York Building Congress, our local construction market is expected to continue the upward trajectory of growth experienced in recent years for the foreseeable future. Estimates in the report, placed construction spending in 2019 at a level of $61.5 billion. This was an increase of almost 10 percent over 2018. Based on its report, the New York Building Congress sees construction industry spending here in New York City reaching the unprecedented level of $65.9 billion in 2020 and $62.1 billion in 2021.
The Building Congress report also anticipates continued stability in the record high levels of construction employment locally. New York City construction employment was expected to ”top out” at 161,000 in 2019 before receding slightly to over 157,000 jobs in 2020 and 153,600 jobs in 2021.
Other good news for contractors contained in the report, was that residential construction spending would reach $19.7 billion by the end of 2019, up from $17.3 billion. Likewise, non-residential construction (office construction, institutional projects, sports and entertainment space, hotels) was forecast to reach $21.2 billion in 2019, up from $20.4 billion in 2018.
In addition, the Metropolitan Transportation Authority (MTA) was expected to increase its spending for new construction projects by about 9% to $8 billion by the conclusion 2019. The Port Authority was expected to increase its investment in New York City capital projects to $2.1 billion from the $1.7 billion spent in 2018.
In spite of the good news in the Building Congress report, STA members should be wary of the growing legislative and regulatory overreach coming from Albany and City Hall and the accompanying economic impact . Mushrooming safety requirements from City Hall and onerous contractual requirements from Albany, will continue to raise the cost of doing business for construction contractors. Contractors can also expect to experience increasing insurance costs due to the ongoing inaction in Albany to enact any kind of Scaffold Law reform. Securing timely payment from both public and private entities will continue to present one of the biggest challenges to our members. The STA will proactively continue its fight for its members in Albany and City Hall in order to lessen the impact that government overreach will continue to have on their economic “bottom line”.