Rubenstein Associates, Inc.
Public Relations
Contact: Bud Perrone (212) 843-8068

For Immediate Release

NEW YORK CITY CONSTRUCTION SPENDING TO REACH $18.4 BILLION IN 2005 AND COULD TOP $21 BILLION IN 2006-2008, ACCORDING TO NEW YORK BUILDING CONGRESS

Citywide Construction Activity Buoyed by Continued Residential Growth, Renewed Commercial Office Sector Strength and Major Public Capital Spending

NEW YORK, November 15, 2005 – Total construction spending in New York City is expected to reach a record $18.4 billion in 2005, according to a preliminary update of New York City Construction Outlook , an annual forecast and analysis prepared by the New York Building Congress. This level of spending represents a modest 2.8 percent increase over 2004 levels.

Looking ahead, New York City construction spending could exceed $21 billion in each of the next three years according to the preliminary update, which is prepared in recognition of a rapidly evolving construction marketplace and as a preview of the complete 2006-2008 report to be released by the Building Congress early next year.

The update demonstrates that residential construction continues at a record-setting pace, with 27,500 new units expected to be authorized this year, up from 25,200 units in 2004, and nearly 30,000 units projected for 2008.

Office construction has slipped somewhat in 2005, with only one major start (One Bryant Park) and seven other Manhattan buildings in development. The Building Congress expects this sector to rebound considerably with 11 buildings planned for 2006-2008.

Total 2005 nonresidential construction, which includes office construction as well as spending on other commercial space and by institutions such as universities and hospitals, is expected to reach $4.5 billion in 2005, an increase of $450 million over 2004. Spending in this sector is forecast to exceed $5 billion annually through 2007.

Public sector construction spending has increased modestly, from $9.4 billion in 2004 to an estimated $9.7 billion in 2005. Based on the latest multi-year capital plans of government entities entrusted with New York City's infrastructure, however, public sector spending will accelerate to $12 billion in 2006 and reach $13 billion by 2008.

In its tradition of identifying issues behind the expected spending levels, the Building Congress notes that the forecast is contingent upon public spending occurring as planned and the ability of the City of New York and the major public agencies to resolve funding uncertainties.

“While the construction outlook is indeed strong, much depends on the public financing capacity of local government and major public agencies,” says Building Congress President Richard T. Anderson.

“The continued growth in the residential market is extraordinary and the strength of the institutional and infrastructure sectors is very reassuring. These investments have all kinds of positive implications for the City and point to a very strong overall outlook,” Anderson added. “There are questions, of course, such as the availability and cost of skilled labor and materials to support these spending levels. There will be inflationary pressures, no doubt.”

The New York Building Congress prepared Construction Outlook with the assistance of Urbanomics, an economic consulting firm. It incorporates reviews of private construction data as well as public capital budgets and plans at the City, State and Federal levels.

The complete Construction Outlook 20006-2008 is expected to be published by March of 2006.

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