NYC Construction Starts Hit 4-year Lows

NYC construction starts hit 4-year lows.
August 29, 2011

Construction project starts dropped dramatically during the first half of 2011, hitting the lowest level in four years, according to a new report released Tuesday by the New York Building Congress, a trade group. A total of $6.4 billion worth of construction projects started during the first six months of 2011, a nearly 40% drop from the first half of 2010, when construction starts reached $10.6 billion. The most recent first-half figure is even below the $7 billion of new construction logged at the height of the recession in the first half of 2009, much less 2008's first-half figure of $10.8 billion. “Construction activity in the first half of 2011 was extremely disappointing,” said New York Building Congress President Richard T. Anderson in a statement. "The more than $20 billion in construction starts recorded for the year in 2010, amid signs of a slowly strengthening economy, offered hope that the building industry was turning the corner,” he added. “The initial data for 2011, however, tells a story of relative weakness in each sector.” Infrastructure projects such as bridges, highways and mass transit fell 38% to $1.7 billion from the corresponding period last year. That figure was less than half the $3.5 billion in infrastructure projects started in New York City during the first half of 2008, shortly after the start of the recession that began in late 2007. The residential sector also continued to falter. There construction starts dropped to $840 million in the first half of 2011, compared to $1.3 billion in the first half of 2010, and $3.6 billion during the same period in 2008. First-half construction starts in the non-residential sector—which had been buoyed in 2010 by the start of the World Trade Center Transit Hub, Barclays Arena in Brooklyn and the renovation of Madison Square Garden—fell 40% to $4.6 billion. There at least the number marked an improvement over the $3.8 billion in starts in the first half of 2009 and $3.7 billion in 2008. The $1.2 billion expansion of Terminal 4 at John F. Kennedy International Airport was the largest single construction start by value during the first half of 2011. The project alone accounted for more than one quarter of all non-residential building starts in New York City. There are signs of improvement, beginning in the second half of 2011. Building permits are up 12% this year, which offers hope for a modest rebound in residential construction. The Whitney Museum and Fordham University are moving ahead with major building projects, and Boston Properties has announced it will restart its $1 billion, West 55th Street tower project in the coming months.
         
 

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