Market Reports

NYBC: Alterations and Rehabs Lead Building Starts

A day after President Barack Obama called for putting construction workers—hit hard in the economic crisis—back to work in a speech at the National Urban League, the New York Building Congress released grim data for local firms specializing in ground-up construction.

The NYBC analyzed McGraw-Hill Construction Dodge data and found that office construction starts in New York City were down 30 percent in 2011 compared to the year previous. In 2010 those starts hit $2.6 billion, but in 2011 only $1.8 billion in new office construction projects got going.

construction worker e1309208536633 NYBC: Alterations and Rehabs Lead Building StartsOf key importance in the findings is the term ground up. That’s because the vast majority of 2011’s totals were for alterations and renovations, upgrades to New York’s older stock of buildings. These upgrades to existing space, $1.5 billion of the $1.8 billion in 2011 starts, benefited architects and others, but not ground-up construction workers.

“For architects, contractors and skilled trades working in the interiors sector, there is good news in these numbers,” New York Building Congress president Richard Anderson said in a statement about the findings. “In addition to investments being made by firms who are leasing space in existing buildings, many companies are spending considerable amounts to reconfigure and modernize their leased spaces to promote more efficient and productive work environments.”

He said, however, that there was concern for construction and design firms that are dependent upon ground-up development, adding that as some current projects are completed such as One World Trade Center and the International Gem Tower, there may be little work for them.

“As more efficient designs and technologies allow companies to compress more workers into tighter spaces, it reduces demand for new buildings,” Mr. Anderson said. “In addition, office employment and the overall economy are not expanding at the pace necessary to support a number of planned office developments. Our concern is that this could lead to a surge in unemployment among certain skilled trades, such as ironworkers and operating engineers, if there are no new projects to replace the towers that are nearing completion.”

President Obama, in his National Urban League speech, called for infrastructure projects and the rehabbing of foreclosed homes as a way to put construction workers back to work.

cgaines@observer.com

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