Since the recession of 2007 – 2010 the area of the U.S. economy that has suffered the greatest has been the construction industry. When the bottom fell out of the real estate market, construction came to a near standstill. All the larger projects in Westchester County were put on hold. The construction industry is the last industry to make a recovery.
In an article by Ross Pepe, President of both The Construction Industry Council of Westchester and Hudson Valley, Inc. and Building Contractors Association of Westchester and Mid-Hudson Region, Inc. in the Westchester Business Journal, he stated the long suffering recovery for the construction industry is finally taking hold 5 years after the official end of the great recession of 2008 – 2010. Mr. Pepe keeps track of the recovery through total number employed by the unions. For example, The International Union of Operating Engineers, Local 137 hit the highest number of man hours worked in 2007 when it reported total number of hours worked at 1.5 million hours that year. Since then, Local 137 saw the total number of hours worked each year dwindle by a 1/3 down to 978,000 hours, a third reduction. After several years of slow recovery, the numbers are climbing back but still 20% of what its high was in 2007.
The comeback in the construction and building market place is because of the comeback of the overall economy. Mr. Pepe points out state and municipal funds have grown by increased tax revenue from taxes, home sales (mortgage & recording taxes) and a rise in travel and entertainment. Low gas prices are also having a favorable effect on household budgets.
As in other economic recoveries, construction and building are always the first sectors to go into recession and they are last to come out of it. However, this has not occurred in the economic recovery. People postponed need maintenance and repairs and now must do the repairs by hiring construction crews. The head of construction actively in the region is the 3.9 billion project to replace the Tappan Zee Bridge. Some 150 specialty subcontractors and service companies are being employed. The replacement project is creating new jobs each week to what is expected to be 6000 construction jobs before the bridge is finished in 2018. In addition to transportation and infrastructure construction other areas of the economy causing growth in the construction industry are health care, retail and government spending on the municipal level. In healthcare, all major hospitals in the region are advancing or completing building and expansion projects as the competition for healthcare consumer increases. Many healthcare institutions are redoing office buildings for medical clinics and offices.
Another growth area is the education sector where schools and college boards are addressing the physical need of their buildings. In the City of Yonkers, the average age of its public schools is about 80 years old with one building dating back 100 years. These buildings are being rehabbed or repurposed as the education field goes through major renovations. Mr. Pepe points out construction employment will continue as projects resulting from $2.5 billion in new moves for infrastructure improvement, improvement from the bank settlement windfall ear marked for New York State. Another massive driver of construction jobs is the $1 billion project in Orange County to building a 2.5 mile long bypass tunnel 600 feet below ground around a leaking portion of the Delaware Aqueduct. New York City has invested $20 billion in water quality projects. The Westchester Counties Department of Public Works has plans for $185 billion in capital projects in 2015. In Sullivan County, a $1 billion casino project is being felt throughout the region. As the regions contractors and service companies’ return to work with greater regularity that survived the recession and two harsh winters, are looking for recovery that has been long in coming.
If you, or someone you know, are planning on selling or buying property, we request that you contact our office so that we can help take you through all of the necessary steps required to close on that property. You can reach us at (914) 288-0800. We look forward to helping you through this frustrating time and prevent you from becoming overwhelmed in the process.