Residential construction spending is estimated to increase by 50 percent in 2014, according to a report released today by the New York Building Congress.
Led by the surging residential sector, overall construction spending is anticipated to increase by 10 percent in 2014, for a total of $31.5 billion this year. If realized, this would mark just the fourth time — and the first since 2010 — that construction spending in the five boroughs surpassed the $30 billion level.
The Building Congress forecasts that construction employment will hit 122,700 in 2014, up 1.5 percent from last year’s 120,900 jobs. Both figures are below the peak of 132,600 jobs produced by construction activity in 2008.
In the post-recession doldrums of 2010, $2.4 billion went to residential construction spending; this year, the housing sector is expected to account for $10.2 billion, up from 2013’s record high of $6.8 billion. According to the Building Congress predictions, residential spending will be 32 percent of all construction spending in the city in 2014. About 20,000 new dwelling units are slated to be built this year, a 9 percent increase from 2013, when 18,378 units were constructed.
Building Congress President Richard T. Anderson expressed concern over not enough homes being produced, relative to spending. “While the luxury residential market is booming in Manhattan and in parts of Brooklyn and Queens, we have our work cut out for us in terms of achieving Mayor de Blasio’s plan to create or preserve 200,000 units of affordable housing over the next decade,” he said in a statement.
Government spending is anticipated to remain flat, reaching $13.5 billion in 2014 after last year’s total of $13.7 billion. Non-residential construction, which includes office space, institutional development, sports/entertainment venues, hotels and retail, is estimated to strike $7.8 billion in 2014, a decrease from $8.0 billion in 2013. If the forecast is accurate, this year would mark the lowest level of non-residential spending since 2005. The Building Congress report noted that major institutions, such as Columbia and NYU, are primed to bolster spending with major expansion projects, while millions of square feet of new office development are in the works at the World Trade Center and the Hudson Yards district.