Could Unemployed Construction Workers Save the MTA?

Rents are up. Subleases are down. The city, fairing better than most during the recession, appears well on its way to recovery, even if it will be a slow one. One sector that has yet to feel the pick up, though, is the construction industry, and it remains in a precarious position.

According to the New York Building Congress’ annual Construction Outlook, work and jobs continued to shrink during 2010, albeit at a slower rate than the year before. Spending is forecast to reach $23.7 billion this year, down 12 percent from the $27 million spent in 2009, which saw a 23 percent decline from $31 billion in 2008. There has also been a loss of 16,000 construction jobs over the past two years, roughly 5,000 of which were cut last year.

The Building Congress predicts a slight turnaround next year, to 120,400 jobs, 300 more than there were in 2009, with about 7,500 to be gained in 2012. Spending is also expected to rise to $25.8 billion next year and $28.6 billion the following year.

The vast majority of that work is expected to come from the MTA capital budget, which will see an increase of $4.1 billion over the next two years. Residential construction is largely stagnant and contingent on the unwindings of the hundreds of stalled projects in the city, as there is virtually no financing for new projects. Meanwhile, outside the bounds of the World Trade Center site, which is averaging about $2 billion in construction per year, there is almost no commercial construction to speak of.

Government spending on construction, though it fell by $1 billion last year, is at its highest level as a proportion of the industry since 1996, contributing 62 percent of all work. Some of this is from about $1 billion in stimulus money, some of it is state contribution, yet the vast majority comes from the city, followed by the MTA and Port Authority. As the mayor struggles with continued budget shortages and the MTA has a woeful $10 billion funding gap–with both gubernatorial candidates talking tough on cutting the authoirty further–it could prove difficult for the construction industry to continue counting on the public sector for work.

At the same time, there has been almost no indication the private sector could pick up the slack, as lending remains tight and uncertainty continues to plague most sectors of the economy. As a result, the Building Congress urges further pressure on the MTA and elected officials to maintain and even expand funding commitments for transit projects, as well as educational ones (looking at you, NYU), healthcare, and the continued rezoning of the city.

mchaban [at] | @mc_nyo Could Unemployed Construction Workers Save the MTA?