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Construction Costs Recede Amid Recession

NEW YORK CITY—A New York Building Congress report cites several indicators of declining costs, although Turner Construction says the rate of decline may be ebbing

By Paul Bubny | Updated on September 17, 2009

NEW YORK CITY—Construction costs in the region have ebbed by as much as 10% in the past year as the nationwide recession hit home, the New York Building Congress reported on Wednesday. The Building Congress report notes that although it’s difficult to zero in on the precise rate of decline, given the lack of uniformity in various measurements of costs, “there is no doubt that building in New York City is less expensive today than it was a year ago.”

Hard construction costs for offices and banks slipped 10% between 2008 and 2009, according to a Building Congress analysis of FW Dodge data on new buildings. For apartments, hard costs declined 9% over that period, while the cost of building public facilities such as schools and libraries is off by 8%.

Further, the Building Cost Index published by Engineering News-Record indicates that construction costs in New York City fell slightly in three consecutive quarters since October 2008. The BCI has fallen 1.1% in the city as of August, according to the Building Congress. ENR uses local prices for portland cement and lumber, the national price for structural steel and local union wages for carpenters, bricklayers and iron workers, to derive the index.

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