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 | Jul 17, 2019
Design services demand stalled in June
Project inquiry gains hit a 10-year low.
Market Data | Jul 16, 2019
ABC’s Construction Backlog Indicator increases modestly in May
The Construction Backlog Indicator expanded to 8.9 months in May 2019.
K-12 Schools | Jul 15, 2019
Summer assignments: 2019 K-12 school construction costs
Using RSMeans data from Gordian, here are the most recent costs per square foot for K-12 school buildings in 10 cities across the U.S.
Market Data | Jul 12, 2019
Construction input prices plummet in June
This is the first time in nearly three years that input prices have fallen on a year-over-year basis.
Market Data | Jul 1, 2019
Nonresidential construction spending slips modestly in May
Among the 16 nonresidential construction spending categories tracked by the Census Bureau, five experienced increases in monthly spending.
Market Data | Jul 1, 2019
Almost 60% of the U.S. construction project pipeline value is concentrated in 10 major states
With a total of 1,302 projects worth $524.6 billion, California has both the largest number and value of projects in the U.S. construction project pipeline.
Market Data | Jun 21, 2019
Architecture billings remain flat
AIA’s Architecture Billings Index (ABI) score for May showed a small increase in design services at 50.2.
Market Data | Jun 19, 2019
Number of U.S. architects continues to rise
New data from NCARB reveals that the number of architects continues to increase.
Market Data | Jun 12, 2019
Construction input prices see slight increase in May
Among the 11 subcategories, six saw prices fall last month, with the largest decreases in natural gas.
Market Data | Jun 3, 2019
Nonresidential construction spending up 6.4% year over year in April
Among the 16 sectors tracked by the U.S. Census Bureau, nine experienced an increase in monthly spending, led by water supply and highway and street.