NYC Construction Activity Soars More than 30%

NEW YORK CITY—It seems everywhere you turn here there is a construction crane or workers with hard hats toiling on a new project. Thanks to a continued influx of new major residential and commercial developments, construction activity in New York City rose 31% to $26.1 billion in 2014 as compared to a year earlier.

The city's construction starts last year were easily the best year for new projects since the beginning of the recession in 2008, according to New York Building Congress analysis of construction data from Dodge Data & Analytics released today.

Housing starts rose in value for the fourth consecutive year, reaching $11.9 billion in 2014, a 73% increase from 2013 when residential construction starts reached $6.9 billion. In addition, 2014 construction starts were up more than 350% from a post-recession low of $2.6 billion in 2010.

The New York Building Congress states that the 2014 data reveals the surge in residential construction is largely due to ongoing demand for luxury apartments. New apartment developments accounted for eight of the top 10 projects by total estimated value last year. Fifteen residential projects had construction values of at least $175 million and a combined construction value of $5.8 billion, or 58% of all new, ground-up housing construction projects in 2014.

“The fact that eight of the top 10 projects by value are multi-family apartment buildings is nothing short of amazing, especially when you consider the strength of the overall market,” says Building Congress president Richard T. Anderson. “Even in 2012 and 2013, which were strong years for residential, just four of the top 10 were residential projects.”

Construction starts in the non-residential sector, which includes offices, hotels, schools, hospitals, transit stations, power plants, and other institutional buildings, climbed 26% from $8.3 billion in 2013 to $10.5 billion in 2014. The 2014 increase ended a stretch of three consecutive years of declines in non-residential starts.

Within the non-residential sector, commercial buildings accounted for $5 billion in new projects, while the institutional sector was responsible for $4.8 billion in construction starts.

“As encouraging as 2014 was, 2015 is already shaping up to be a blockbuster year in the non-residential sector,” Anderson says. “We are not even two full months into the New Year, and already we have seen the resumption of full-scale construction at 3 World Trade Center and the start of 55 Hudson Yards. With the addition of 30 Hudson Yards, which is expected to begin later this year, we are looking at nearly 6.5 million square feet of new office space in those three projects alone.”

The Building Congress reports that one sector saw a sharp decrease in activity—public works. That sector reached $3.7 billion in activity last year, a dip of 21% from the prior year when starts totaled $4.7 billion.