NEW YORK CITY-In another sign of improving fundamentals in the city, the New York Building Congress has revealed to GlobeSt.com that it sees an even brighter future for Gotham in 2013 than it predicted late last year.

The prognosis for government spending is much healthier than previously forecasted, residential development is on the upswing, institutional projects are numerous and, in may cases, ambitious, and cultural institutions continue to press forward with construction, says Richard Anderson, president. Office building has been lackluster, he admits, but there's enough going on to accommodate the office slump.

“If these trends continue, and office picks up, over the next few years we could be in a rather strong situation,” he tells GlobeSt.com. “Maybe not as much as five or six years ago but we'll be still fairly strong. Actually, we're already fairly strong, and things could get even better. So we're optimistic.”

Back in October, in its “New York City Construction Outlook, 2012-2014,” Anderson's office said capital spending by the city would average 8.7 billion annually through next year.

Now, the Congress has boosted its government sector forecast to $9 billion thanks to a concerted effort by the Mayor's office, Hurricane Sandy and an infusion of cash for the MTA, Anderson explains.

“The biggest factor is the New York City capital improvement program,” he says. “It's particularly large now because throughout his administration, Bloomberg has had a commitment to a strong capital program.” Repairs needed for Hurricane Sandy-damaged property, meanwhile, are giving the city at least a temporary uptick. “It created $2-3 billion in projects, or about a 10% boost,” notes Anderson. NYC Transit is also playing its part in driving spending forward. “Two years ago, the MTA wasn't funded, but now it has funding for two years.”

Residential, Anderson says, “is coming back strongly after falling through the floor in 2009. In the first part of the decade, 30,000 units were being built a year and that dropped to 6,000 in 2009. But now it's coming back; last year was 10,600 units and this year we think it'll be closer to 12,000.”

In the meantime, the institutional sector is growing by leaps and bounds. “Hospitals and universities are the strongest segment. NYU is building a new hospital, New York Presbyterian announced several project the other day—

and only one was a big project, the rest is just upkeep-CUNY is doing work and Columbia University is building a new campus on 125^th Street,” Anderson says.

“Cultural facilities also are doing a lot of work,” he adds, citing the Whitney Museum's new SoHo building as an example of such activity. “The NYC market has a great deal of depth and diversity, so even though office is not doing great, others are filling the gap."

Several market conditions have stalled office construction, Anderson asserts. “Job growth has been in hotels, universities, hospitals, retail and the like. Traditional office work is just not growing and where it is,” he notes, “companies are using so much less square footage per employee.”

Also a factor, perhaps because of the aforementioned trends, is a seeming reluctance by corporate tenants to sign leases. “There are so many projects that are ready to move forward but are stalled because owners can't find anchor tenants,” says Anderson. At Hudson Yards, for example, only one building has an anchor tenant, Coach, but the remaining structures are in limbo. Still, he believes demand for office space will return.

“It's there,” he suggests, “it will come.”