NYCEDC's blog

New York City Construction Projects Reach New Heights

 |  NYCEDC

Current construction trends indicate a strong New York City economy.  In 2016, the number of construction project starts was the highest in four years.

The majority of starts were building projects: 4,066 non-residential[1] and 3,817 residential building projects were initiated in 2016.  Meanwhile, there were 514 construction starts unrelated to buildings, which included infrastructural projects varying from bridges to dams, sewerage, and electric power systems.[2] The trends in development are meaningful because they coincide with gains for output and jobs. In turn, stakeholders are more likely to fund construction projects when perceptions of the economy are strong.

The commercial sector led the growth in non-residential construction in 2016, accounting for over 75% of non-residential projects. Manhattan’s non-residential commercial projects make up the bulk of 2016 projects, with 2,261 of the 3,087 located in the borough. Nearly to thirds (1,628) were office and bank buildings.    

Manhattan also had the highest number of residential projects in 2016: 1,385, followed by Brooklyn with 1,157. The majority of projects in both boroughs were apartment buildings.  However, Manhattan is the only borough in which the number of apartment buildings increased over 2015 to 2016, from 1,274 to 1,377.  In Brooklyn and Queens, growth in residential projects stemmed from increases in the number of one- and two-family houses, although apartments still represent a significant share of residential construction projects in absolute terms. 

Queens had the highest number of non-building projects last year, driven by the construction of 39 streets and highways and 47 miscellaneous non-building projects.  Manhattan trailed closely with the construction of 38 streets and highways and 38 miscellaneous non-building projects.      

Figure 1: NYC's non-residential and residential building starts have increased steadily since 2013; non-building projects also peaked in 2016.

Source: Dodge Data & Analytics, year ending in December

Although the number of construction projects has increased, the number of dwelling units contained in those projects halved from 51,825 in 2015 to 24,926 in 2016 due to a change in legislation. The number of dwelling units plunged following the January 2016 expiration of tax abatement 421a, which incentivized developers to build affordable units.  Manhattan especially illustrates the trend: while the number of apartment building projects increased between 2015 and 2016 from 1,246 to 1,377, the number of apartment dwelling units decreased from 11,836 to 6,235. Without the tax break, larger apartments were constructed in 2016, encompassing fewer housing units, or spaces which can be sold or rented.  In a win for affordable housing, 421a was revived this April,[3] so we expect to see a rise in housing units in 2017.

Figure 2: In each borough, the number of units peaked in 2015 and decreased thereafter with the exception of Staten Island which has sustained modest growth since 2014.

Source: Dodge Data & Analytics, year ending in December

In 2015, there were 133,911 construction workers in NYC, the highest level of employment the City has seen in the past decade.  Firms in Queens employed 36% of construction workers (48,279), followed by firms in Manhattan with 28% of workers (36,954) and in Brooklyn with 22% of workers (28,841).[4] Even more significant increases in employment are anticipated: the New York Building Congress predicts that construction employees will reach 142,600 by 2017.[5]

Figure 3: The number of jobs in the City’s Construction industry peaked in 2008 and then declined when the recession hit. 2011 brought and upswing in construction jobs, which surpassed pre-recession levels in 2015.

Source: Quarterly Census of Employment and Wages

Ten-year growth trends reveal that the largest wage growth has been in the subsectors with the lowest employment growth.  For example, in the City’s Highway, Street, and Bridge Construction industry, wage growth reached over 50%, whereas employment growth was at 4% from 2006 to 2015. The Building Equipment Contractors subsector had the largest absolute employment in 2015, but the lowest wage growth across the industry, increasing 21% between 2006 and 2015.[6]

Figure 4: In the City, Construction subsectors with lower wage growth tended to have higher employment growth from 2006 to 2015 and vice versa.  Similarly, smaller subsectors to the right of the graph boasted some of the highest average wages in 2015 (parenthesized).  Bubble size represents 2015 employment estimates.

Source: Quarterly Census of Employment and Wages

While average wages are high across subsectors, it is important to note that median wages for associated occupations are lower due to outliers on the high end of the pay scale, and the higher paying jobs are less accessible to those without at least some College education. 38% of Construction Workers with a High School education make over $50,000, whereas 64% of those with a Master’s, Professional, or Doctorate Degree make over $50,000.[7]

Census data reveals that a mere 8% of New York City construction employees are female. Notably, Construction is one of two industries in which women earn more than men: in the City, women’s median earnings in the Construction industry are 126% of men’s. Women earn $1.26 for every $1.00 that men earn. The only other industry in which women make more than men is in Wholesale Trade, though the share of women’s earnings per men’s earnings is smaller, at 103%. Higher paying construction jobs for women are especially significant given that, in New York City, women’s earnings are typically about 86% of men’s.[8]

Further analysis by occupation offers insight into the unusual, “reverse” wage gap.  After Office and Administrative Support and Construction and Extraction, the third most common occupation for women (15%) is Management. Female Construction Managers earned a median of $70,671 in 2015, whereas male Managers earned $52,143.[9] Economist Candace Howes hypothesizes that the few women who enter the construction field are likely high skilled and are concentrated in union jobs which negotiate higher wages.[10] 



[1] Non-residential projects include the following sectors: Commercial, Manufacturing, Education & Science, Dormitories, Hospital & Health Treatment, Public Buildings, Religious, Amusement, and Miscellaneous Non-Res.

[2] Dodge Data & Analytics, year ending in December

[4] Quarterly Census of Employment and Wages 

[6] Quarterly Census of Employment and Wages

[7] American Community Survey, 2011-2015

[8] American Community Survey, 2011-2015

[9] American Community Survey, 2011-2015

Economic Data

Archive

Column

Best of the Blog

Sign-up to receive the best of our weekly blog posts.

Featured Blog Post