Construction Costs in NYC On the Rise
Construction costs in New York City, which started to increase in 2010, are continuing to rise, according to a review of multiple surveys made by the New York Building Congress. This comes after a decline in 2009.
NYBC reviewed a series of surveys including Engineering News-Record’s Building Cost Index, which shows that construction costs in New York City have risen 3.55% so far in 2011 and 2.42% in 2010, after falling 1.94% in 2009.
Separately, a survey by Rider Levett Bucknall of the New York metropolitan region finds that New York City construction costs have so far increased by 2.13% in 2011 and by 0.54% for all of 2010, after dropping 3.39% in 2009, NYBC says.
ENR uses the national price for structural steel, local prices for portland cement and lumber as well as local union wages, plus fringes, for carpenters, bricklayers and iron workers. RLB reviews similar data but also includes estimates of bid price changes, including overhead and profit.
NYBC says the “rate of increase in local construction costs for 2011 is roughly equivalent to the national average, which indicates that much of the cost increase here is attributable to rising material costs.”
Richard T. Anderson, NYBC president, says that after years of “relentless” cost escalation, New York City had “a bit of a respite” in 2009 and even in 2010 due to the economic downturn. “Unfortunately, the 2011 cost increases are starting to mirror the rate of cost escalation experienced during the middle of the previous decade when construction was soaring,” he says.
Moving forward, Anderson says, “it will be useful to examine the effect, if any, that the recently concluded construction labor negotiations have on overall construction costs. He expects it to take a long time for the agreements reached to filter into the data.
The surveys also showed that although New York City continues to be “one of the most expensive construction markets in the United States,” with office tower construction costing about $290 per sq ft, it is less expensive than its main international counterpart, London. Class A office space construction costs there are about $505 per sq ft.