Highest Levels of Construction Spendingand Employment Since 1960's

New York City is in the midst of a building boom the likes of which have not been seen since the 1960's. While construction activity has been on the rise for a number of years, it picked up considerable steam in 1999 and 2000.

Construction spending has risen across the board -- from high-rise office towers and non-residential developments to housing and schools. This dramatic surge in building and development is a clear sign that New York City is continuing to add jobs, tax revenue, residents and tourists. Representing one of the City's key industries, the design, construction and real estate professions combined have both benefited from and significantly contributed to the City's prosperity.

In today's economic climate, there is no shortage of work for architects, engineers, contractors, skilled labor and other building trades. In fact, since June of last year, New York City has added 6,800 employees to its construction workforce. Consequently, the year 2000 has the potential to be the highest year for construction jobs in the City in more than 25 years.

Based on a review of capital budgets and private sector development plans -- highlighted in the charts and graphs that follow -- this surge in construction activity marks a continuing trend. Construction spending and employment is expected to remain at these levels at least through 2003.

Charts and Graphs

Behind the numbers-problems lurk

Workforce Stretching at the Seams
For the first time in decades, the building industry's available workforce is straining to meet the intense demand for new construction. Skilled workers in virtually all trades are working unprecedented amounts of overtime. The shortage threatens to intensify in the coming years as a large percentage of the workforce nears retirement, and not enough young New Yorkers are being trained to replace them. Additional workers and training programs are needed to keep up with construction activity projected through 2003 and beyond.

Infrastructure Critical
While public construction spending is indeed rising, the expected level of increase is not keeping pace with private-sector construction. The City's unprecedented growth is adding jobs, residents, businesses and tourists that require new infrastructure to support their activities. New subways, schools, and housing, as well as improved bridges and roadways, are needed. The majority of public construction in the coming years is devoted to maintaining the City's infrastructure rather than expanding it to meet the needs of a growing economy.

Office Space Crunch
Manhattan office vacancy rates have fallen from 16.0 percent in 1995 to 5.5 percent in 2000. Though 13.6 million square feet of office space is either planned or under construction, most of this space is pre-leased and does not increase available office space enough to accommodate the projected need for 40 million square feet by 2010. Further proof of the demand for space is The New York Times recent report that the asking price for Manhattan office space has increased by 28 percent this year, 17 percent from May to July alone. To keep the economy growing, and to retain corporations that have long formed the bedrock of the City's business community, development of additional office space is vital.