The residential market has experienced a precipitous decline after an unprecedented boom period, according to a report issued yesterday by the New York Building Congress.
"After five consecutive years in which residential construction exceeded 30,000 new dwelling units, the Building Congress projects construction of just under 6,300 units with a total construction value of $3.5 billion in 2009. The forecast calls for 7,900 units ($4.0 billion) to be produced in 2010 and 9,900 units ($5.0 billion) in 2011. These 24,000 units constructed between 2009 and 2011 will fall 10,000 units short of what was constructed in 2008 alone," the report maintained.
Non-residential construction, which includes office space, institutional development and sports/entertainment venues, the report continued, is experiencing a similar decline: "Non-residential spending is expected to reach $6.9 billion in 2009, down from $11.1 billion in 2008, a decline of 38 percent. Spending in this category is expected to decline further, to $6.3 billion in both 2010 and 2011."
"While there is no ignoring the 20 percent decline in annual spending over the past year, there is reason to be encouraged given that 2008 was one of the most productive in New York City history," said Building Congress President Richard T. Anderson. "Even with the decline, 2009 construction spending remains 45 percent greater than was achieved five years ago, in 2004. While external events could affect the forecast, it is encouraging that our initial projections show no additional deterioration, with annual spending hovering between $25 billion and $26 billion through 2011."
Overall, the report found, "construction spending in New York City is expected to reach $25.8 billion in 2009, a 20 percent decline from 2008 when spending reached an all-time high of $32.4 billion. Spending is forecast to remain steady in the coming years, reaching $25.0 billion in 2010 and $25.6 billion in 2011 - for a three-year total of $76.4 billion. While the decline from peak spending is substantial, these numbers, if realized, are still robust."
"Despite the 20 percent reduction in spending, construction employment may decline just 8.3 percent this year. After reaching a high of 130,000 jobs last year, 2009 industry employment should reach 119,000 jobs, which is a greater employment base than all but four of the past 15 years. The analysis forecasts 116,000 jobs in 2010 and 120,000 jobs in 2011," it said.
"After five consecutive years in which residential construction exceeded 30,000 new dwelling units, the Building Congress projects construction of just under 6,300 units with a total construction value of $3.5 billion in 2009. The forecast calls for 7,900 units ($4.0 billion) to be produced in 2010 and 9,900 units ($5.0 billion) in 2011. These 24,000 units constructed between 2009 and 2011 will fall 10,000 units short of what was constructed in 2008 alone," the report maintained.
Non-residential construction, which includes office space, institutional development and sports/entertainment venues, the report continued, is experiencing a similar decline: "Non-residential spending is expected to reach $6.9 billion in 2009, down from $11.1 billion in 2008, a decline of 38 percent. Spending in this category is expected to decline further, to $6.3 billion in both 2010 and 2011."
"While there is no ignoring the 20 percent decline in annual spending over the past year, there is reason to be encouraged given that 2008 was one of the most productive in New York City history," said Building Congress President Richard T. Anderson. "Even with the decline, 2009 construction spending remains 45 percent greater than was achieved five years ago, in 2004. While external events could affect the forecast, it is encouraging that our initial projections show no additional deterioration, with annual spending hovering between $25 billion and $26 billion through 2011."
Overall, the report found, "construction spending in New York City is expected to reach $25.8 billion in 2009, a 20 percent decline from 2008 when spending reached an all-time high of $32.4 billion. Spending is forecast to remain steady in the coming years, reaching $25.0 billion in 2010 and $25.6 billion in 2011 - for a three-year total of $76.4 billion. While the decline from peak spending is substantial, these numbers, if realized, are still robust."
"Despite the 20 percent reduction in spending, construction employment may decline just 8.3 percent this year. After reaching a high of 130,000 jobs last year, 2009 industry employment should reach 119,000 jobs, which is a greater employment base than all but four of the past 15 years. The analysis forecasts 116,000 jobs in 2010 and 120,000 jobs in 2011," it said.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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