Construction spending in NYC to hit $83bn in 2023

Construction spending in the city of New York is expected to rise sharply to $83bn by the end of 2023 – an increase of around $13bn, says a forecast by trade group, New York Building Congress (NYBC).

In a forecast published last week, NYBC predicts that, even accounting for inflation, construction spending in the city this year will stand around $7.7bn higher than it was before the pandemic in 2019, an increase of around 10%.

It said that the spending increase was being fuelled by projects which had been delayed by the pandemic restarting as well as new construction for manufacturing warehousing, life sciences and schools.

Spending in inflation-adjusted dollars is expected to reach $285bn over a three-year period ($261bn accounting for inflation), growing to $88 billion in 2024 and then to $89bn in 2025.

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Compared to the pre-pandemic, three-year period from 2017 to 2019, this reflects an inflation-adjusted increase of $40bn.

Nonetheless, the report also said that less than 11,000 new homes were likely to be completed in the city in 2023, around half the number built the previous year.

“Although high interest rates on construction starts and property mortgages are expected to somewhat depress property values through reduced demand, escalating material and labor costs, as well as ongoing supply chain issues, have significantly contributed to increased building costs and are not likely to deflate with more development,” the report said.