Construction spending in the city topped $30 billion last year for the first time since the bubble burst in 2008, according a report released Thursday by the New York Building Congress.
That spending totaled $30.6 billion in 2012, up 3.6% from $29.5 billion in 2011, and not far off the all-time high of $31.1 billion in 2007. Last year's gain was fueled largely by a rebound in residential building and a surge in government spending tied in part to Superstorm Sandy relief efforts. Last year's performance marked the second straight year of growth for the construction industry after a precipitous decline to $25.9 billion in 2010.
"It really is a stronger than anticipated market," Richard Anderson, president of the Building Congress, said. "If you look at it sector by sector, it's easy to see why."
Residential construction is booming again, and while it remains well below the peak levels of the last decade, it has recovered faster than expected, Mr. Anderson noted. In fact, residential construction jumped 56% last year, to $5.1 billion. In all 10,599 units of housing were built, up 19% from 2011.
Government spending has held strong at $15.5 billion, down only $100 million from 2011, and not far off the 2008 peak of $16.3 billion. The Building Congress attributes this strength to ongoing work on a number of huge government projects, like the Second Avenue subway and the World Trade Center PATH Hub, and post-Sandy rebuilding work.
Non-residential work, as a whole took some of the steam out of last year's activity. The volume of work in that sector, which includes office, institutional and industrial projects slipped 8.5%, to $9.8 billion. Even there, however, Mr. Anderson said there were bright spots. "Universities and hospitals continue to build, which has been very good for the institutional segment," he said.
The big drag last year was office construction, which Mr. Anderson blames on still weak job growth. "We're not getting the jobs we need, and the jobs we are getting, they're taking up less space," Mr. Anderson said. Employers, trying to cut cost during the recession, shrunk not only their workforce but the amount of space they allocate to each staffer, by cramming more people into the same or even less space.
"The offices are ready to go, they're designed, whether it's Hudson Yards or the World Trade Center or on the avenues, but the leases just aren't there yet," Mr. Anderson said. "But they'll come."
Overall, the Building Congress remains optimistic and expects the construction market to continue to grow. "We've got a lot of different things going on," he said.
