Covid-19 recovery driving NYC’s $86 billion construction spending

The figure represents an all-time high

 A new report from the New York Building Congress has revealed that New York City is set for its largest ever annual construction spend in 2022, totaling $86 billion.

The figure is a substantial increase from the $48 billion spent in 2021. Even when compared to pre–Covid-19 levels, spending has still dramatically increased, up by $13.7 billion from 2019, a 19 percent increase, in inflation-adjusted dollars.

It comes amid the city’s ongoing recovery from the impact of Covid-19, which caused significant disruption to construction and building activities.

‘Against all odds, construction spending and building levels over the next three years are projected to be relentlessly bullish in the face of economic headwinds and seismic changes in the city’s workforce patterns,’ the report stated.

It added: “While some of the increased spending in 2022 to 2024 represents cost increases in construction, much of it is attributed to counterbalancing depressed construction activity in 2020 to 2021.”

Produced in collaboration with the New York Building Foundation, the report also acknowledged the expected impact of the “historic” Infrastructure Investment and Jobs Act (IIJA), passed in 2021.

It argues that the IIJA will help to rebuild New York City’s civil infrastructure, including roads, bridges, and rail, and guarantee further measures, such as clean drinking water for every New Yorker, and investments to combat climate change.

Bouncing back

Residential investment in new development, rehabilitation, and interior renovation has accounted for 23 percent of the increase in construction spending between 2019 and 2022, and is forecast to increase further, reaching $32.5 billion by 2024.

Meanwhile, non-residential spending, which includes office space, retail, hotels, institutional development, entertainment venues, and recreational facilities, is expected to reach $106 billion in nominal spending between 2022 and 2024 – a 57 percent increase from pre-pandemic levels.

“Construction activity is often heralded as an indication of a region’s overall economic prosperity,” the report states. “This report emphasizes our successes, proving once again that the strength, resilience, and determination of hard-working New Yorkers cannot be shaken.”