NYC construction spending to fall, public role shrinks-report
May 1 (Reuters) - New York City's construction sector likely will shrink to a total of $25.1 billion in 2013, from an estimated $28.8 billion this year, because public investments in schools, mass transit, roads and bridges and the like are expected to drop, according to a report issued on Tuesday.
The projection for 2012 compares with an overall total of $27.4 billion in 2011, which was down 3.5 percent from 2010.
Though Mayor Michael Bloomberg's city administration and the Metropolitan Transportation Authority continued to build during the Great Recession, that funding now looks strained.
"Agencies are bracing for a severe downsizing of their budgets," said Richard Anderson, the president of the New York Building Congress, in a statement.
Any retreat in construction spending by the government likely will be long-term, he warned. "Like an ocean liner, it is virtually impossible to quickly reverse course on massive, multiyear capital programs," Anderson said.
Last year, the government sector made up 53 percent of all construction spending, totaling $14.4 billion. That was down 10 percent from the 2010 total for this sector of $16.1 billion.
In contrast, residential construction is expected to show "a dramatic resurgence" in the next few years.
This sector fell to $2.3 billion in 2010, rose to $2.9 billion in 2011, and is expected to hit $4.8 billion in 2012. The projection for 2013 is $6.8 billion; if achieved, this would top the previous peak of $6.4 billion in 2007.
The building of offices, hotels, and sports and entertainment venues is expected to rise to $11.2 billion this year, but then drop to $8.6 billion in 2013.
This forecast drop could change if the economy improves, and projects that have stalled are able to find financing, the report said.
Spending on this sector totaled $10.1 billion in 2011, little changed from the year before, when $10 billion was spent.
Employment in the construction industry should rise to 120,800 in 2012, but fall to 105,400 in 2013, the report said. Last year, this sector averaged 111,500 jobs, which was less than one percent below the 2010 figure.