Nonresidential construction spending in New York City is projected to reach $39 billion in 2018, a nearly 66% increase over the previous year. However, spending is also expected to tail off significantly during the following two years, according to a new report, Construction Outlook 2018-2020, released today by the New York Building Congress.
Spending for all types construction in New York City is in its fifth year of growth and could hit a record $61.8 billion this year, 25% more than in 2017. That growth is attributable in part to several large-scale projects. The New York Building Congress forecasts that, despite some anticipated falloff over the next two years, total construction spending through 2020 will total $177 billion.
Nonresidential construction alone—which includes offices, institutional, government buildings, sports and entertainment, and hotels—is forecast to add a record 39 million gross sf this year, followed by 30.4 million sf and 23.4 million sf in 2019 and 2020, respectively. The projected decrease in construction spending for nonresidential buildings over the next two years can be pegged to the completion of several big projects by 2020, such as the 58-story 1,401-ft-tall One Vanderbilt, and three buildings within the $20 billion Hudson Yards redevelopment.
(All this new floor space is coming at a time when New York’s office vacancy rate hovers around 13%, according to the website Optimal Spaces.)
Residential construction spending—which in New York is primarily for multifamily buildings—will total $14 billion in 2018, up 6% from the previous year. Next year, residential construction spending is expected to hit $15 billion, and then recede to $10.6 billion in 2020. (The totals include renovations and alterations.)
Over the three years, 60,000 housing units and 107.2 million gross sf will be added, states the report. The average annual unit count, though, would be off from the 27,898 housing units added to the city in 2017.
The report states that construction employment will show growth for the seventh consecutive year in 2018, and top 150,000 jobs for the second consecutive year. While the Building Congress predicts an employment dip—to 145,600 in 2019 and to 147,700 in 2020—those numbers would still be higher than the average for the last five years.
Related Stories
Market Data | Aug 18, 2020
July architectural billings remained stalled
Clients showed reluctance to sign contracts for new design projects during July.
Market Data | Aug 18, 2020
Nonresidential construction industry won’t start growing again until next year’s third quarter
But labor and materials costs are already coming down, according to latest JLL report.
Market Data | Aug 18, 2020
6 must reads for the AEC industry today: August 18, 2020
The world's first AI-driven facade system and LA's Greek Theatre restoriation completes.
Market Data | Aug 17, 2020
5 must reads for the AEC industry today: August 17, 2020
5 strategies for creating safer hotel experiences and how to manage multifamily assets when residents no longer leave.
Market Data | Aug 14, 2020
6 must reads for the AEC industry today: August 14, 2020
The largest single sloped solar array in the country and renewing the healing role of public parks.
Market Data | Aug 13, 2020
5 must reads for the AEC industry today: August 13, 2020
Apple Central World opens in Bangkok and 7-Eleven to buy Speedway.
Market Data | Aug 12, 2020
6 must reads for the AEC industry today: August 12, 2020
UC Davis's new dining commons and the pandemic is revolutionizing healthcare benefits.
Market Data | Aug 11, 2020
6 must reads for the AEC industry today: August 11, 2020
Elevators can be a 100% touch-free experience and the construction industry adds 20,000 employees in July.
Market Data | Aug 10, 2020
Dodge Momentum Index increases in July
This month’s increase in the Dodge Momentum Index was the first in all of 2020.
Market Data | Aug 10, 2020
Construction industry adds 20,000 employees in July but nonresidential employment dips
Association warns skid will worsen without new relief.