New York Construction Market Steady Post-Pandemic

After a severe slump in early 2020, the New York construction market is back on track. In the second quarter of 2020, the industry was down 3.8%, or $9.8 billion in value. This was due to several factors, including the ongoing uncertainty surrounding the real estate industry and government finances. The recovery has been a steady one, however, and construction activity has increased over the past year. In fact, all classes of construction contractors in New York are now bound by underwriters.

Before the pandemic hit, the construction industry added a record number of jobs. The average annual growth in the sector was 3.2 percent. By early 2020, the industry had reached a peak of 406,600 jobs. Then, the market shrank by 44,400 jobs (10.9 percent) and declined to 362,200 jobs by the end of 2020. This loss was the worst annual decline in the industry in over 25 years but was significantly less than the decline in total private employment. Despite this, the industry has been on the rebound for five to seven years, and it is still far above where it was before the pandemic.

The City's construction market is slowly regaining momentum, with residential construction driving much of the activity. However, there are still lingering consequences of the Covid-19 epidemic, including problems in supply chain management and project planning. According to Jonathan Grippo, a counsel at Goulston & Storrs, the epidemic has impacted many aspects of New York City's construction industry.

The construction industry in New York State is the fourth largest industry in the country. However, it has experienced the most job losses. Prior to the Great Recession, the construction industry had been on the rise, with employment increasing for nine consecutive years. By 2015, employment in New York City and New York State had reached record highs. In addition, New York City construction employment increased by 43.5 percent from 2011 to 2019, making it the fastest growing sector in the City.

A recent report by BLS shows that the New York construction industry suffered disproportionately from the COVID-19 pandemic. Compared to the rest of the country, downstate construction employment declined by 12.9% or more. By early 2021, the industry is still below the national recovery trend.

The construction industry is beginning to rebound, with backlogs starting to clear up. In July, new business confidence increased by six points, while revenue expectations increased by four points. Several large projects were submitted to the insurance marketplace, but start dates are not yet confirmed.

Despite the challenges in the post-Pandemic, the construction industry is expected to emerge from the crisis stronger. However, the new COVID-19 requirements, which mandate safety protocols, will add cost and new risks to the industry. Additionally, contractors with multiple locations will have to stagger their workforces to meet compliance guidelines, take temperature readings on site, and implement plans to get back to work as soon as possible.

The New York construction market is expected to grow after the biden administration passes the American Rescue Plan. The ARP includes federal and state aid, which will increase government construction activity and spending. The plan also includes a $1.7 trillion infrastructure plan. With all of the new federal aid, and pent-up demand, the construction market is expected to grow again in New York.

The City's construction industry is taking advantage of the growing demand in business services. However, it faces a number of challenges posed by the BSNY program participants. Some of these include lack of high school education, housing instability, and childcare issues. Additionally, 16 percent of BSNY participants live in a COVID-19 zip code.