NEW YORK CITY-A bump in infrastructure- and nonresidential-related construction spending helped offset a nosedive in residential projects last year, the New York Building Congress said Friday in a new report. The report, which said the city’s construction industry has had a productive decade, was more iffy about the sector’s near-term prospects.
“The industry’s short-term prospects are tenuous at present as a return to peak construction and employment is dependent upon the strength of the economic recovery and the ability of government to continue investing in the face of large deficits,” Building Congress president Richard T. Anderson says in the report. “However, to this point, government and institutional investment have held up and some major projects are moving forward. In addition, despite the recent building boom, any current oversupply of office and residential space may be short-lived.”
Infrastructure spending by government entities increased between 2000 and 2009, rising from $7.9 billion at the start of the decade to $15.5 billion last year, the report states. The steady rise in infrastructure spending helped cushion the blow of an 82% dropoff in residential permits issued by the New York City Department of Buildings last year compared to 2008, making ’09 the worst year in a decade for multifamily construction, according to a Building Congress analysis of US Census data conducted earlier this spring. The multifamily sector produced just $2.5 billion worth of work in ‘09, off approximately 60% from the ’08 total of $6.3 billion.
Last year’s citywide construction spending tally of $26.7 billion would have been higher were it not for that steep drop in residential work, the Building Congress says. Both government spending and nonresidential construction projects actually increased in ’09 compared to ’08.
Nonresidential spending rose $1.3 billion from ’08 to $8.7 billion last year, the second highest level in a decade. On the whole, ’09 gave the construction industry its third best 12-month period in the past 10 years, says the Building Congress.
Annual construction industry employment across the five boroughs was off 8.4% last year from ’08, yet still managed a fourth-place showing for the decade at 120,400 jobs. The low point of the decade was 2004, when the annual total was 111,700 employed, while the peak was reached in ‘08 peak at131,400 jobs.
The guardedly optimistic outlook of the Building Congress is borne out by national figures. In April, the US Department of Commerce said construction nationwide rose to a seasonally adjusted annual rate of $847.3 billion, 0.2% above the revised February estimate of $845.5 billion. Similarly to the trends seen locally, a 2.3% rise in public spending nationwide during the month offset a decline of 0.9% in private construction.
According to published reports on Friday, the tallies for April are expected to show another slight increase month to month. The Commerce Department will issue its April report on Tuesday morning.
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