The pandemic has shaved $16 billion off projected construction spending in 2020 and 2021, according to a new report.
The New York Building Congress estimates spending will reach $55.5 billion this year, down from the $65.9 billion the group previously forecast. Next year, spending will be just about flat at $56.9 billion, which is also a drop from the trade group’s earlier estimate of $62.1 billion.
The group does not see 2022 as a comeback year, either: Spending will drop back down to $56.1 billion, the construction industry trade group’s report foresees.
The analysis points to the months-long shutdown of non-essential construction in the city during the pandemic, as well as the broader economic downturn gripping the region, as the source of the lower spending forecasts. Much of the drop can be attributed to decreases in spending in residential and non-residential (including office, retail and hotel) development.
Conversely, government spending on projects was forecast to increase this year and the next, despite massive pandemic-related budget deficits at every level of government and the big public authorities. The Building Congress forecasts that such spending will hit $21.1 billion in 2020, up from $19.7 billion the previous year, and then $23.1 billion in 2021. It will level out in 2022 at $21.9 billion, according to the report.
The Metropolitan Transportation Authority says it will have to cannibalize its capital program if the federal government does not answer its request for a $12 billion bailout, and the Port Authority of New York and New Jersey is seeking $3 billion from Washington.
Average construction employment between 2020 to 2022 is projected to drop 14 percent from the levels of 2017 to 2019. According to the Building Congress report, 128,200 construction jobs will be created in 2020. That’s projected to rise to 136,650 in 2021 and 140,200 in 2022.
(Source: New York Building Congress and New York Building Foundation)