According to an analysis made by the New York Building Congress, New York City local construction costs have increased from .8% to 4.9% through the first three quarters of 2010 with construction spending in New York remaining above $20 billion a year. Nationwide, construction costs have increased between .1% and 7.2%.
Using a series of surveys in its analysis including Engineering News-Record’s Building Cost Index which shows that construction costs in New York City have risen by 3.3% in 2010, after a .9% decline in 2009 while nationwide, costs have increased by 5.6%, the Building Congress was able to deduce that recent cost increases are more from changes in volatile commodity prices such as diesel fuel, copper aluminum and steel, rather than by wage increases. The data analyzed does not break down labor costs as a separate unit. Another survey used in the Building Congress’ analysis was that of the New York metropolitan region by Rider Levett Bucknall which uses the same data as ENR but also includes estimates of bid price changes. The RLB survey finds that construction costs in the area have increased by .8% so far in 2010, after a 3.4% decline in 2009.
“The good news is that New York City is in no way experiencing the relentless rate of cost escalation experienced during the building boom,” said New York Building Congress President Richard T. Anderson. “The bad news is that, depending on which index you use, New York has given back most if not all of the cost declines we experienced in 2009.”
The analysis also shows that New York’s construction costs are keeping up with its international and national rivals such as London in which Class A office space construction reached $288 per sq ft in New York, compared to $418 per sq ft in London as of this past April. The cost of multi-tenant residential construction reached $209 per sq ft in New York compared to $252 per sq ft in London. New York City construction costs were also lower than Tokyo, Sydney, Honolulu and San Francisco, on par with Boston and Los Angeles but higher than Beijing, Seoul, Hong Kong and Washington DC.