(Mark your calendars: RealShare New York, Oct. 12, 2011 in New York City and RealShare New Jersey, Sept. 12, 2011 in New Brunswick, NJ)
NEW YORK CITY-Construction is showing “across the board weakness” says New York Building Congress president Richard Anderson, after the organization released a new report finding a 40% decline in new projects during the first half of 2011. This year, approximately $6.4 billion in new projects were started across the five boroughs, compared to the $10.6 billion of construction starts at the same time in 2010, based on an analysis of McGraw-Hill Construction Dodge data.
“It reflects the fact that there’s considerable weakness in new construction across the board,” Anderson tells GlobeSt.com. “What it shows is that there’s not a lot of new things getting started. We know the residential sector is weak, and office work is on the drawing board, but it has not been officiated yet.”
On the residential side, new building continued its losing streak, dropping to $840 million in the first half, compared to the $1.3 billion during the same period in 2010. In the non-building sector--which includes work on bridges, highways, mass transit and other infrastructure systems--dipped from $1.7 billion in the first six months to $1 billion during the same period this year, a decline of 38%. “Public work is still going forward, and only the institutional work seems to be holding up,” Anderson says. “It still shows across the board weakness.”
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Much of the construction that pumped 2010’s numbers up at the World Trade Center Transit Hub, the Barclays Arena in Brooklyn and the renovation of Madison Square Garden caused this year’s numbers to fall from $7.6 billion to $4.6 billion now. At the same time, 2011’s numbers were higher than 2009 (at $3.8 billion) and 2008 (at $3.7 billion)
However, positive signs exist, Anderson says, describing that the $1.2 billion expansion of Terminal 4 at John F. Kennedy International Airport amounted to be the largest single construction start by value in the first half, accounting for more than one-quarter of all non-residential building starts citywide.
Other major projects include the Metropolitan Transportation Authority’s $200-million Mother Clara Hale Bus Depot in Central Harlem, followed by a $195-million Manhattan garage and distribution center for use by the New York City Department of Sanitation and UPS, the Building Congress says.
Also on the MTA front is its $176-million 63rd Street subway station along the Second Avenue Subway, which was spared when the MTA board raised their debt ceiling to $6.9 billion to pay for all its capital projects. On the private side, the biggest private sector construction project is the $175-million Jerome L. Greene Research Center at Columbia University, according to the Building Congress.
Anderson was also pleased to see the Port Authority of New York and New Jersey pass a revised fare and toll increase to ensure completion of the World Trade Center, the Lincoln Tunnel Helix and other projects. Building permits are also up by 12%, and work will start moving ahead at the Whitney Museum, Fordham University’s new Manhattan law school and Boston Properties’ restart of $1 billion project at 55th St.
“That was another positive step,” Anderson says. “Our annual construction outlook, which is a forecast as opposed to a retrospective on just six months will be issued in October. We anticipate a more positive report in that construction outlook.”
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