Construction spending is expected to be at a record high this year, according to a forecast released Tuesday from the New York Building Congress.
The trade group’s annual analysis projects New York City construction spending will hit $43.1 billion in 2016, marking the first time spending would surpass $40 billion and representing a 26 percent increase from a year earlier when spending hit $34.3 billion.
The Building Congress expects the bump to continue through 2018, projecting that construction spending will continue to hover above $42 billion over the next two years. Adjusting for inflation, spending on residential and non-residential buildings is projected to be 47 percent greater than the city’s previous boom, in 2007.
Construction in the residential sector, whether for new buildings or renovations, is on pace to have its third consecutive record-breaking year, the report said, with a projected $13.4 billion in spending for 2016.
“The residential construction sector remains in the midst of a historic run,” Building Congress President Richard T. Anderson said in a statement.
“It is going to be very tough, if not impossible, without a renewal of the 421-a tax reduction program or better progress on the de Blasio’s administration’s efforts to rezone areas of the city to accommodate greater density and more affordable units,” Anderson said.
For non-residential construction, office buildings are expected to lead the growth, the report found, helping prop up projected spending for this sector to $17 billion, up 27 percent from the year before.
“While the non-residential sector has benefited from spending on hotels and hospitals, as well as colleges and universities, the big story is office construction, which is at its highest level in more than a quarter of a century,” Building Congress Chairman Richard Cavallaro said.
In Manhattan alone, an expected 11.6 million square feet of office space is expected through 2018.
Also, while spending on infrastructure has fallen over the past 7 years, it looks like the tide is turning in 2016, the forecast noted.
Spending on infrastructure hit a high in 2008, reaching $16.3 billion; last year spending on mass transit, roads, bridges and other essential infrastructure dipped to $8.1 billion.
This year, however, the Building Congress projects spending will rise to $12.7 billion, followed by about $14 billion in spending in both 2017 and 2018.
The city is expected to spend roughly $6.7 billion this year on infrastructure, nearly double what it spent last year. The Metropolitan Transportation Authority is expected to spend $3.9 billion, up from last year’s $2.8 billion.
Still, the Building Congress is calling on the city to better define its long-term priorities by creating a 20-year capital needs plan, a 10-year capital strategy and then fund a 4-year capital plan. It also claims that funding the city’s vast infrastructure needs requires a much greater use of dedicated revenue streams.
One notable exception is the Move NY plan, which the Building Congress believes would generate much-needed funds for the MTA and New York City Department of Transportation through a more equitable tolling system.
Under the plan — a sort of revised version of congestion pricing — tolls would be added to Manhattan’s four East River Bridges while they would be lowered at crossings such as the Verrazano Narrows, the Throgs Neck and other outlying crossings.
Essentially, the plan creates a consistent toll for drivers to and from Manhattan south of 60th Street. The funds would be used for service expansion and upgrades in the city.