Modernization that leans heavier on technology to attract a younger, diverse, and skilled workforce is likely to determine the future success and growth of New York’s construction industry.
That is one of the key takeaways from a “State of the Construction Industry” survey of 20 New York metro-area AEC firms that the accounting consultancy Anchin, Block & Anchin conducted last November, and whose results it released earlier this month.
![Technology is a primary driver of success in construction. Chart: Anchin](/sites/default/files/inline-images/Anchin%20-%20technology.png)
The report found a New York market that is at once resilient and facing “unprecedented challenges.” Its “most pressing” issues, as stated by nearly two-thirds of the firms polled, are labor shortages and public funding for infrastructure projects. Retaining talent is critical to these companies, and has led AEC firms toward greater flexibility about allowing remote or hybrid work, and increasing worker salaries. Thirty percent of the firms polled are focusing on management training and career development.
LIFE SCIENCES AND INDUSTRIAL SEEN AS GROWTH SECTORS
![Infrastructure and life sciences are expected to be the most vibrant sectors. Chart: Anchin](/sites/default/files/inline-images/Anchin%20-%20verticals.png)
Since the coronavirus pandemic was declared in March 2020, more than half of the firms surveyed have diversified into the infrastructure sector, no doubt in anticipation of the $1.2 trillion federal infrastructure bill that President Biden signed into law last November. Eighty-five percent of the AEC firms polled expect infrastructure to be their market’s “busiest” sector over the next five to 10 years, followed by the life sciences/healthcare sector (into which nearly half of the firms polled diversified over the past 18 months}.
The survey’s authors also point to the industrial sector’s “growing momentum” as an in-demand asset driven by e-commerce.
However, AEC firms lamented the pressures being exerted on their companies’ cashflows from, most prominently, slower client payments, labor and materials cost inflation, insurance costs, and project delays.
![Labor shortages continue to plague projects. Chart: Anchin](/sites/default/files/inline-images/anchin%20-issues.png)
Half of the survey’s respondents said that their volume of work has increased during the pandemic, by an average of 36 percent. But 30 percent reported decreases in their companies’ work volumes, by an average of 22 percent. And 42 percent of those polled said their backlogs were down from 2019, by an average of 43 percent.
![Half of the firms polled report higher work volumes during the pandemic. Chart: Anchin](/sites/default/files/inline-images/Anchin%20-%20work%20volume.png)
RESILIENCE AND SUSTAINABILITY ARE CENTRAL
![Decarbonization of buildings is a pressing concern after regulations clamp down on emissions levels. Chart: Anchin](/sites/default/files/inline-images/Screen%20Shot%202022-01-06%20at%2011.55.48%20AM.png)
The usual suspects—tunnels, roads, bridges, rail stations—were cited by the survey’s respondents as being among the structures desperate for repair or replacement. A surprising 40 percent of the firms polled also identified “decarbonization” as a need, most probably because of New York’s Local Law 97, which passed in 2019, and creates carbon emissions limits for most commercial buildings over 25,000 sf, as well as alternative paths for the law’s two compliance periods: 2024-2029, and 2030-2034. Building owners must submit emission intensity reports, stamped by a registered design professional, every year starting in 2025 or face substantial fines.
“The overwhelming trend relates to resilience, particularly in the face of a growing urban population; and sustainability/climate change needs, which are being felt acutely,” the report states.
Related Stories
Market Data | Apr 20, 2021
The pandemic moves subs and vendors closer to technology
Consigli’s latest market outlook identifies building products that are high risk for future price increases.
Market Data | Apr 20, 2021
Demand for design services continues to rapidly escalate
AIA’s ABI score for March rose to 55.6 compared to 53.3 in February.
Market Data | Apr 16, 2021
Construction employment in March trails March 2020 mark in 35 states
Nonresidential projects lag despite hot homebuilding market.
Market Data | Apr 13, 2021
ABC’s Construction Backlog slips in March; Contractor optimism continues to improve
The Construction Backlog Indicator fell to 7.8 months in March.
Market Data | Apr 9, 2021
Record jump in materials prices and supply chain distributions threaten construction firms' ability to complete vital nonresidential projects
A government index that measures the selling price for goods used construction jumped 3.5% from February to March.
Contractors | Apr 9, 2021
Construction bidding activity ticks up in February
The Blue Book Network's Velocity Index measures month-to-month changes in bidding activity among construction firms across five building sectors and in all 50 states.
Industry Research | Apr 9, 2021
BD+C exclusive research: What building owners want from AEC firms
BD+C’s first-ever owners’ survey finds them focused on improving buildings’ performance for higher investment returns.
Market Data | Apr 7, 2021
Construction employment drops in 236 metro areas between February 2020 and February 2021
Houston-The Woodlands-Sugar Land and Odessa, Texas have worst 12-month employment losses.
Market Data | Apr 2, 2021
Nonresidential construction spending down 1.3% in February, says ABC
On a monthly basis, spending was down in 13 of 16 nonresidential subcategories.
Market Data | Apr 1, 2021
Construction spending slips in February
Shrinking demand, soaring costs, and supply delays threaten project completion dates and finances.