by Mike Dwyer, Principal, M&H Cost & Review Group
At the height of the economic downturn, more than 700 construction projects were idled across New York City’s five boroughs, according to the city’s Department of Buildings. Three years later, new construction has returned, and many of the once idled projects are being redeveloped; some are being repurposed. Over $20 billion worth of new construction starts occurred in 2012, primarily due to the groundbreaking of the first office tower at Hudson Yards, for which we are proud to provide construction review and monitoring services. Since the beginning of 2013, another $8.5 billion worth of new construction has started, which is a 16% increase over the same period last year.
The 20 U.S. Cities With The Most New Construction
New construction for the entire country was up 10% in 2012, and experts predict it will climb another 12% in 2013. The biggest driver of that recovery is the multifamily housing being built in many metro areas.
Commercial building starts rose 10% in 2012 and are expected to rise another 15% in 2013. One of the major factors weighing commercial development down is financing, which temporarily dried up and still remains tight.
Construction costs are starting to creep up, year over year, with increasing steel and other metal prices. Labor costs have not seen a full recovery and, with the end of the PLA (Project Labor Agreement) credits, labor increases are, undoubtedly, not far off.
As much as many pessimists say we are still not seeing the light at the end of the tunnel, I suggest that if you look back just a few years, the light is closer than you might expect.
The construction industry is one of the largest indicators of how our economy is doing. Since 2012, we have seen the construction a number of projects completed and units sold. That’s how financing becomes available.
Before a closing, our plan and cost reviews provide the lender and/or investor with critical information about the entire construction project. Plan development, budget development and schedule accuracy are key elements that are just a part of our review. If you have a project being considered for financing and would like to discuss how Merritt & Harris, Inc. can assist you, please feel free to contact us.