Government Sector Fuels Construction Spending
New York City construction spending reached $29.3-billion in 2013, up 6% from 2012, and helped by growth in the government sector, according to a new New York Building Congress (NYBC) study.
Government spending accounted for $13.7 billion, or 47% of construction spending last year, the study says. That is only a slight increase from the $13.4 billion spent in 2012. Spending in this sector peaked in 2008 at $16.3-billion, but has remained in the $13 to $14-billion range during the past three years, the study shows.
Residential spending, which reached its highest level in decades in 2013, accounted for $7.3-billion of the total, a 36% increase from the prior year. A total of 18,095 new residential units were built in 2013, up 64% from 2012 and the most new since 2008.
“Construction spending in the residential sector was greater last year than it was during the height of the building boom—even after factoring for inflation,” Dick Anderson, NYBC president, said in a statement. He cautions, however, that the amount of new housing units has shrunk since the period between 2005 and 2008, when more than 30,000 new housing units were produced annually.
For the third consecutive year, non-residential spending has tumbled reaching $8.4 billion last year, a 6.9% decrease.
Anderson calls the drop “disappointing.” NYBC had expected spending in this sector to reach $10 billion when it issued its annual forecast last October, he says.
The study also shows that the city’s construction employment reached a five-year high of 120,900 jobs last year, a 4% rise from 2012.
Anderson says that construction accounted for $45 billion in economic output last year and more than $23 billion in labor income.
Earlier this year, another NYBC study revealed that the number of residential building permits rose 71% last year to 18,095. Queens posted the largest percentage gain with 3,161 units, a rise of 107%. The jump was driven by the start of two affordable housing towers at Hunter's Point South in Long Island City, which broke ground in March 2013. The residential towers include a total of 941 permanently affordable units. The first phase of the project is slated for completion this year.