New York City’s long-running building boom will peak this year, before new office and residential projects peter out in the coming years and the number of construction jobs falls by almost 30,000 by 2010, according to a report released on Tuesday by the New York Building Congress.
End Seen to New York Building Boom
The building congress, a trade group for construction and real estate companies, estimates that construction spending on new housing, office towers, stadiums, subway tunnels and schools will decline slightly in 2009 before falling to $26.2 billion in 2010, from $33.8 billion this year. But even that forecast may be a bit optimistic.
The report noted that construction had already begun on “the majority of the 15 office towers factored into the 2009 and 2010 estimates.” But at least one-third of those projects are already in doubt, given the flagging economy, turmoil on Wall Street and the virtual disappearance of construction financing for new projects.
In 2010, builders are expected to create only 18,500 new residential units in the five boroughs. That's nearly a 50% drop over two years.
Spending on non-residential construction will continue to rise to more than $11.5 billion next year, but will plummet to $7.1 billion in 2010, the group predicted.
Another area affected by Wall Street's woes is government projects, which account for more than half of all construction spending in the city.
Both the city and state have begun imposing severe cost-cutting measures in the face of evaporating Wall Street revenues.
The report found that those cuts will have a delayed effect on government-funded projects, with spending rising to $17.4 billion in 2009 and then dropping to $14.4 billion the following year.
Building boom to go bust in a year, says industry group study