NEW YORK CITY-According to data released Monday from the New York Building Congress, construction starts in the city fell by 31% in 2011, compared to numbers from 2010. The numbers used were gleaned from analysis of McGraw-Hill Construction Dodge data.
Perhaps most striking is that non-residential starts—offices, hotels, schools and the like—had risen 41% in 2010, due in large part to several high profile construction projects. In all, 2010 saw seven construction starts valued at $500 million or more—including work at the World Trade Center and two major arenas.
“Given that 2010 was the year of the big-ticket construction project—with the World Trade Center, Madison Square Garden and Barclays Arena accounting for $6 billion in construction starts alone—it is not all that surprising to see a dip in 2011,” NYBC president Richard T. Anderson said in a prepared statement. “Still, the 31 percent decline in New York City is very troubling.”
That decline was the result of a precipitous 39% drop in the non-residential sector in 2011, data shows.
Steven Charney, newly appointed chairman of law firm Peckar & Abramson, known for its construction law practice, tells GlobeSt.com that the results aren’t surprising. He says that it all points back to events that seized the market toward the middle of last year.
“There was a growing hint of optimism as the year rolled into its first few months,” Charney says. “But last summer when the craziness in Washington about budgets and then the European financial crisis hit—it seemed that almost every bit of optimism that we had been hearing in the first six months of 2011 basically got put on hold.”
Beginning in the summer of 2011, Charney says, he began hearing of more and more projects being put on hold. “I remember how striking the discussions were that I would have with the various elements of the industry that I’m in constant dialogue with as to just how many projects seemed to be placed in abeyance,” he says of the fallout from the US debt ceiling debacle and uncertainty relating to the European financial crisis. “So it doesn’t surprise me that the Building Congress would be reporting just that.”
Also not surprising: spending in the public sector, for infrastructure projects like roads, bridges and water systems, fell off as well. Starts for these fell 35% in 2011—from $4 billion spent in 2010 to just $2.6 billion spent in 2011.
A bright spot in the NYBC’s numbers was percentage of construction starts for residential construction. These rose by 24%, from $2.3 billion in 2010 to $2.9 billion in 2011.
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