Construction Costs Rise 8% In NYC As New Project Filings Drop
Supply chain issues and employment costs are pushing construction costs higher in New York City than in other U.S. markets, according to a new report from construction consultant Rider Levett Bucknall.
NYC has seen an 8% increase in construction costs compared to a year ago, according to Commercial Observer, which first reported the RLB study. Across the five boroughs, total construction costs grew by 2.7% over the past quarter, faster than the 2.4% national average.
The increase in construction costs can be attributed to a number of factors, including rising material costs, labor shortages, and the impact of the COVID-19 pandemic on supply chains and logistics. In particular, the cost of lumber, steel, and other building materials has increased significantly in recent months due to global supply chain disruptions and increased demand for housing and commercial space.
At the same time, new project filings in New York City have dropped by 18%, with many developers and investors delaying or cancelling projects due to concerns about the economic climate and the future of the city’s real estate market. This decline in activity has raised concerns about the potential impact on job creation, economic growth, and the overall health of the construction sector in the city.
Industry experts have called for greater investment in affordable housing and infrastructure projects to stimulate growth and create new opportunities for construction firms and workers. They have also urged policymakers to take steps to address rising costs, such as by reducing regulatory burdens, increasing funding for training programs and apprenticeships, and promoting innovation in construction technology and processes.
Despite these challenges, many industry professionals remain optimistic about the long-term prospects for the construction sector in New York City. They point to the city’s strong demand for housing and commercial space, as well as its reputation as a global center for innovation and entrepreneurship, as factors that will continue to drive growth and create opportunities for skilled construction workers and firms in the years ahead.