Last year also marks the first time since 2010 that non-residential spending increased from the prior year, and with multiple Hudson Yards towers under construction and with the full-scale resumption of work on 3 World Trade Center, the near-term prospects for the commercial sector remain bright, NYCB said.
Government construction spending, which includes investments in mass transit, public schools, roads, and bridges, was the weakest of the three sectors, but still increased 7% to $14.3 billion, from $13.4 billion in 2013. Government spending peaked at $16.3 billion in 2008 and has remained in the $13-14 billion range over the past four years, NYBC said.
The increase in construction spending is reflected in the gains in employment. In 2014 construction employment averaged 127,600 private sector workers, up from 122,100 in 2013, 116,000 in 2012, and 112,200 in 2011, according to NYBC.
The group noted that after three consecutive years of construction job growth, 2014 industry employment stood just 3.2% below the peak level of 131,800 jobs that were created during the height of the previous construction boom in 2008.
In terms of sectors, specialty trades, which include plumbers and electricians, accounted for 83,000 jobs in 2014, up from 80,000 jobs in 2013. Workers involved in the construction of buildings accounted for 36,100 jobs last year, up from 33,300 the prior year, while heavy construction and civil engineering produced 8,400 jobs, down from 8,900 in 2013.
Despite the strong jobs growth, construction wages have remained relatively flat in recent years. Average wages earned by construction workers in the private sector rose less than 1% in the first nine months of 2014, the most recent data available.
Construction workers in New York City earned an average of $52,300 through September 2014, compared with $52,000 for the same period in 2013, and $51,200 during the first nine months of 2012. But wages for workers constructing buildings have stagnated. Their wages averaged $70,200 in 2013, compared with $70,100 in 2012 and $70,600 in 2011. Specialty trade workers, on the other hand, experienced modest wage growth, from $68,300 in 2011 and $68,900 in 2012 to $70,300 in 2013.
“While there are likely a number of factors at play, it certainly seems as though the increased use of non-union labor is playing a role here,” Anderson said.
He noted that annual wages have increased 19% between 2008 and 2013 for heavy and civil engineering workers, who remain highly unionized, but just 2% for buildings workers and 6% for specialty trades workers, where nonunion labor has made significant inroads in recent years.
“If the construction market continues to strengthen as anticipated, it will be interesting to see if further increases in demand for labor exert an upward pressure on wages,” Anderson said.