An estimate by the New York Building Congress has construction spending in 2016 at more than $43.1 billion, beating the $41.6 billion high of 2007 and reflecting a 26 percent increase from last year’s $34.4 billion, the Wall Street Journal reports. The surge in construction, led by mega-project Hudson Yards on Manhattan’s West Side and public projects like the Second Avenue Subway, has led to rising construction costs and an attendant surge in the demand for skilled labor, bringing workers to the city from all over the U.S.
According to the industry group’s report, construction spending in the city will hit $127.5 billion in the next three years. Office construction is in the spotlight with over 20 million square feet of new space predicted over the next five years, again much of it in Hudson Yards.
Non-residential construction shows a 27 percent projected spending increase from last year to $17 billion. Until this year, private projects–like apartment buildings and office towers–led construction spending; but a rebound in government construction spending in 2016 has had more of an impact recently though government spending still lagged 39 percent below a 2007 peak. The Metropolitan Transportation Authority and the Port Authority of New York and New Jersey also contributed to the spending uptick.
Residential construction is up to record levels again for the third year in a row, set to hit $13.4 billion in 2016, up from $12.7 billion in 2015. Building congress president Richard T. Anderson said the building industry “is clicking on all cylinders,” but questions whether the pace can be sustained, particularly “without a renewal of the 421a tax reduction program or better progress on the de Blasio’s administration’s efforts to rezone areas of the City to accommodate greater density and more affordable units.”
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