NEW YORK CITY-Construction starts citywide took a steep dive inthe second quarter, plunging 64% from Q1’s $6.9 billion to land at$2.5 billion, according to the New York Building Congress. The Q2results also compare unfavorably on a year-over-year basis, andrepresent a 55% drop from Q2 2008.

“The second quarter numbers are clearly disappointing –especially coming on the heels of two relatively impressivequarters,” Building Congress president Richard T. Anderson says ina report released Tuesday. “While this poor showing couldsimply be a pause on the road to recovery, it demonstrates thatdemand is not yet sufficient to kick-start residential and officedevelopment.”

Even more troubling, Anderson says, is “the lack of constructionstarts by the government sector, which has recently beenresponsible for about 60 percent of all construction activity inNew York City. If the city and state governments are unable tomaintain their capital budgets in the face of declining revenues,and if the federal government loses its appetite for stimulusspending, it looks like rough sledding for the constructionindustry.”