Report: COVID-19 cost NYC construction industry $9.8 billion *Construction Dive

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Dive Brief:

  • The COVID-19 pandemic resulted in $9.8 billion in lost construction activity and 74,000 direct and indirect lost jobs in New York City, according to a report by the Building Trades Employers’ Association. The decline in jobs contributed to a $5.5 billion loss in total wages, the report said.
  • The decline in activity also affected the city’s Minority and Women Business Enterprises, as more than 85% of MWBEs are expected to be out of businesses in the next six months, according to a New York City Comptroller’s Office survey cited in the report.
  • “A decade of employment growth was wiped out in two months last year,” the report said, quoting the New York City Independent Budget Office, which noted that it will take at least five years to recover from the effects of the pandemic.

Dive Insight:

The report also points out the importance of construction unions in New York City, calling them a major driver of the city’s economy.

According to the report:

  • Each $1 spent on construction yields $1.31 spent in the city.
  • Each $1 million spent on construction creates a total of eight jobs in the city.
  • Each job on a construction site results in a multiplier of 1.32 jobs.
  • Construction and real estate comprise 20% of the city’s GDP, while providing 10% of jobs and 5% of wages.

BTEA put forth 14 public policy recommendations, 13 of which would cost no additional money, according to Louis J. Coletti, the organization’s president and CEO. Many of them suggest changes to the procurement process on the state and city level.

“The public procurement process in New York is freaking broken,” Coletti told Construction Dive. The process to procure jobs and get them started takes far too long, he said.

As a result, BTEA hopes to rebuild rapidly by encouraging legislation allowing every public authority in the state to use a design-build procurement process, establishing a public procurement reform task force and expediting the permitting process by the New York City Department of Buildings.

The DOB, which handles regulations, inspections, permitting and licensing for the city, declined to comment on the report.

BTEA also called attention to the general liability insurance cost under the city’s Scaffold Law, which imposes absolute liability on gravity-related injuries, even those to or caused by an impaired worker. Coletti described the Scaffold Law as “absurd.” He isn’t alone in that sentiment.

In late April, three New York contractor groups and the New York State Conference of Mayors and Municipal Officials asked Transportation Secretary Pete Buttigieg to do away with the Scaffold Law for contractors working on the $11.6 billion Hudson River Tunnel project.

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