| NEW YORK
NEW YORK Oct 14 New York City's government,
agencies, institutions and private developers are expected to
spend about $93 billion through 2010 for new roads, office
buildings, apartments, and schools, according to a trade group
coalition report released on Tuesday.
The forecast by the New York Building Congress does not
factor in the effects of the recent weeks of global financial
turmoil that saw the bankruptcy of Lehman Brothers, the sale or
pending sale of Bear Stearns, Wachovia WB.N, and Merrill
Lynch & Co Inc MER.N and the problems at American
International Group Inc (AIG.N).
The global financial crisis is expected to cost New York
City thousands of high paying Wall Street jobs in addition to
the jobs that support them, such as lawyers, accountants,
The credit crisis has prompted Mayor Michael Bloomberg to
ask the City Council to lift term limits to allow him to run
for a third term and to use his financial expertise to steer
the city through a potential economic storm.
"While New York City's economy is certain to be affected by
the losses in the Wall Street community, it is too soon to
accurately analyze how these losses might alter the Outlook,"
the report said.
Construction spending historically has lagged economic
downturns because banks and other lenders and investors have
already allocated much of the construction budgets. The effects
of a downturn may not be felt until 2010 and beyond, the report
Based on the data at hand, the Building Congress expects
construction spending by year-end to reach a record $33.8
billion, a 16 percent increase over 2007. The Building
Congress, a coalition of businesses, labor, associations, and
governmental organizations representing the design,
construction, and real estate interests, sees spending tapering
off to $33.4 billion in 2009 and $26.2 billion in 2010.
The city and state governments and their agencies such as
the Metropolitan Transportation Authority are expected to be
the prime drivers of construction through 2010.
The Building Congress estimates that overall spending on
mass transit, public schools, roads, bridges, and other
essential infrastructure, will reach $17.0 billion in 2008, up
from $15.8 billion in 2007. Capital expenditures are expected
to rise to $17.4 billion in 2009 before dropping to $14.4
billion in 2010.
Residential construction is forecast to reach 35,700 units
this year with a total construction value of $6.8 billion, up
from 31,902 units last year with a value of $5.3 billion.
This spike is partially attributed to a push from
residential developers to get new projects started prior to
July 1, 2008, when a tax incentive program was phased out. The
forecast calls for 20,285 units with a value of $4.4 billion to
be produced in 2009 and 18,500 units, with a value of $4.66
billion, in 2010.
Nonresidential construction, including office space,
institutional development, and sports/entertainment venues, is
projected to rise almost 25 percent in 2008 to $10.0 billion,
and to top $11.5 billion in 2009. However, 2010 spending is
expected to drop to $7.1 billion.
Construction employment, which reached at 127,000 in 2007,
is expected to peak at a record 130,100 workers in 2008, hold
relatively steady at 128,300 in 2009, and drop to 100,250 in
2010, the smallest work force since 1997.
(Reporting by Ilaina Jonas)