NEW YORK CITY-Construction starts citywide took a steep dive in the second quarter, plunging 64% from Q1’s $6.9 billion to land at $2.5 billion, according to the New York Building Congress. The Q2 results also compare unfavorably on a year-over-year basis, and represent a 55% drop from Q2 2008.

“The second quarter numbers are clearly disappointing – especially coming on the heels of two relatively impressive quarters,” Building Congress president Richard T. Anderson says in a report released Tuesday. “While this poor showing could simply be a pause on the road to recovery, it demonstrates that demand is not yet sufficient to kick-start residential and office development.”

Even more troubling, Anderson says, is “the lack of construction starts by the government sector, which has recently been responsible for about 60 percent of all construction activity in New York City. If the city and state governments are unable to maintain their capital budgets in the face of declining revenues, and if the federal government loses its appetite for stimulus spending, it looks like rough sledding for the construction industry.”