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City builders need new mayor’s vote

8:00 am, July 10, 2013

By Sarah Trefethen

A new mayor needs an “affirmative hand” on capital spending, says NYBC.

The New York Building Congress last month revised its forecast for construction activity to say that, by 2014, the city may come within a hair’s breadth of the 2007 boom.

Between a booming residential sector, several major office projects and ongoing capital spending, the organization anticipates New York will support more than 130,600 construction jobs in 2014.

“Maybe it’s not full employment, but it’s close to it,” said Richard Anderson, Building Congress president.

By comparison, the industry peaked in 2008 at 132,600 jobs.

The most variable of the equation’s variables is public spending, already predicted to be a smaller percentage of the whole than it was in 2007, when Anderson said, “every sector was white-hot.”

The Bloomberg administration has scheduled capital spending to wind down once it leaves office, he explained.

“A new mayor will have to come in and have an affirmative hand on the New York City capital budget, because right now it’s programmed to decline,” Anderson said.
Meanwhile, the MTA’s capital program is unfunded after 2014. “Those two together are half of the New York City construction market,” Anderson said.

On the bright side, the demand for residential construction seems impervious to the vagaries of politics.

Residential construction spending is forecast to increase from $5.1 billion in 2012 to $6.0 billion in 2013, and the building congress is further projecting a total of $8 billion in housing construction in 2014, an increase from 2012 of 56 percent.

According to the analysis, the number of housing units produced will rise from 11,000 in 2012, to 13,800 in 2013, and 16,900 in 2014. Meanwhile, between two Hudson Yards towers, the Manhattan West project and anticipated construction at 3 World Trade Center in 2014, the Building Congress projects the addition of nearly 2.5 million square feet of Manhattan office space this year, and another 3.9 million square feet in 2014.

“Working with government to maintain strong levels of public infrastructure investment, and with developers and contractors as the private market recovers, has put us in position to see significant employment gains in the last year and a strong outlook for the coming years,” Gary LaBarbera, president of the 100,000-member Building and Construction Trades Council of Greater New York, said in a statement.

Anderson seemed confident that the city’s workforce and unions would be able to fill the jobs as they become available. The Building Congress supports reforming the nation’s immigration system in principle, he said, though they have not analyzed the specific bills under consideration in Washington.

“We think it’s very important to a healthy construction market,” he said.

RICHARD ANDERSON

Nationally, the Associated General Contractors of America has urged Congress and the administration to reject arbitrary caps on construction workers that were included in the Senate’s immigration legislation as part of a move to avoid future worker shortages that will come if the industry continues to add jobs.

The AGC also urged education officials to rebuild skills-based, or vocational, educational programs designed to help prepare students for careers in construction and manufacturing.

“Now that demand for construction is finally picking up, it is vital to ensure that the industry can find enough qualified workers,” said Stephen E. Sandherr, the association’s chief executive officer.

“There are actions that policy makers should take now before a worker shortage cuts short the industry’s recovery.”

The unemployment rate for construction workers fell below double digits in June for the first time since 2008 as every segment of the industry added employees, according to government data analyzed by the AGC.

Construction employment in June totaled 5,812,000, an increase of 190,000 or 3.4 percent over the past year. Aggregate weekly hours of all new and existing construction employees expanded by an even larger 4.7 percent, as companies put more workers on overtime.

Residential and nonresidential contractors have added workers in nearly equal numbers. Residential building and specialty trade contractors added 5,200 in June and 90,200 (4.4 percent) over 12 months. Non-residential building, specialty trade and heavy and civil engineering construction firms grew by 8,400 workers in June and 99,800 (2.8 percent) from a year earlier.

Architectural and engineering services employment also rose by 2.6 percent over the year.

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