Employment Fell for First Time in Nine Years in 2020
The loss of 44,400 construction jobs due to the COVID-19 pandemic in 2020 was the state’s worst annual decline in the industry in more than 25 years, with more than half the losses coming from New York City, according to a report released today by State Comptroller Thomas P. DiNapoli. Construction was the city’s fastest-growing sector from 2011 to 2019, rising by 43.5 percent, until it was brought to a halt by the pandemic.
“The pandemic has had a devastating impact on the construction industry in New York City,” DiNapoli said. “The sector started back up last June, but even with pent-up demand for certain projects, jobs are still lagging behind the employment rebound in other industries. The state and city have important roles to play in distributing federal relief and the Biden administration’s infrastructure bill could be a boon for the industry as private investment will likely take longer to fully rebound.”
“The building industry has been significantly impacted by the COVID-19 pandemic and resulting economic fallout,” said Carlo A. Scissura, president and CEO of the New York Building Congress. “Comptroller DiNapoli’s report underscores our industry’s historic role as the backbone of New York’s economy, as well as why we must lead this recovery. We need the American Jobs Plan to get New Yorkers back to work, to build the next generation of infrastructure and to keep our region moving forward.”
“The COVID-19 pandemic created uncertainty across all sectors of the economy, and it was no different for the construction industry,” said Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York. “From day one of the pandemic, our members went above and beyond to ensure that essential construction work never stopped, and now, our members are prepared to get to work on the infrastructure projects that will pave the way to recovery and to New York’s future. Investment in construction and large-scale infrastructure projects has always served as the catalyst needed to launch our city’s recovery from times of uncertainty, and with the robust American Jobs Plan being advanced by the Biden administration and Senate Majority Leader Schumer, we’re confident that this time around will be no different.”
Employment Booming Until Pandemic
Before 2020, the nation’s construction employment increased for nine consecutive years, though it never met the peak reached before the Great Recession. In New York state, employment reached a record 406,600 jobs in 2019, falling by 10.9 percent to 362,200 jobs in 2020. Overall, New York state had the highest construction job loss of any state and accounted for nearly 20 percent of the industry’s job losses nationwide. In comparison, California, Texas and Florida had employment declines of less than 5 percent in 2020.
As New York City was the early epicenter of the COVID‑19 outbreak in the United States, the construction industry in the downstate area suffered disproportionately. In 2020, construction employment in the area declined by 12.9 percent, compared to a decline of 1.7 percent in the rest of the state. The city’s construction employment declined by 14.4 percent (23,300 jobs) in 2020, worse than the private sector as a whole.
Queens lost the most construction jobs in 2020 (6,900) followed by Manhattan (6,800), Brooklyn (5,600), the Bronx (1,600) and Staten Island (1,200).
The number of construction firms in New York City grew by approximately 23 percent since 2010, reaching 15,370 in 2020. DiNapoli’s office estimates that construction firms generated $85 billion in economic activity in 2020, representing about 8 percent of the city’s total economic output.
Construction Spending Declines After Nearly Decade of Growth
The New York Building Congress (NYBC) estimates that New York City construction spending (residential, nonresidential and government) in 2020 totaled $55.5 billion, or $5.1 billion (8.5 percent) less than the previous year. This was the first decline after eight consecutive years of growth, during which spending grew at an average annual rate of 12.9 percent to a record high of $60.6 billion in 2019. Spending is expected to remain relatively flat in the next two years.
The American Rescue Plan from the Biden administration includes state and local aid, with New York state receiving $12.7 billion and New York City receiving $5.9 billion.
Government spending on construction was the only category of construction spending that grew in 2020, increasing by 6.7 percent, or $21 billion. In its capital plan, the city expects to spend $10.2 billion in FY 2021 and increase to $15 billion by FY 2025.
The MTA’s $54.8 billion capital plan for 2020-2024 was put on hold in response to the pandemic. This limited the MTA’s spending in 2020 to $6.9 billion, $1.9 billion lower than NYBC estimates. The MTA plans to resume the capital plan in 2021 as it will receive $10.5 billion in federal aid for its operating budget, which includes $6.5 billion from the latest federal relief bill.
The President has proposed a $1.7 trillion American Jobs Plan that provides substantial funding for roads and bridges, rail, ports and airports, water infrastructure, broadband, and other projects A recent counterproposal would reduce the proposal to $928 billion, focusing on transportation infrastructure. The President’s proposal could encourage more expansive private investment across a greater breadth of projects, though any funding for key projects in the region would be welcome.
Still, DiNapoli’s report found that it will likely take years before construction reaches previous heights, and the composition of future construction demand – residential, nonresidential, government – remains uncertain as private spending will have to return before the industry can fully recover.
DiNapoli’s report also noted that:
- Construction was the fourth highest-paying employment sector in New York City in 2020, with an average salary of $87,200. The sector was responsible for $11.8 billion in wages.
- More than a quarter (27 percent) of the workers in the industry earned more than $80,000 in the city.
- Immigrants held 53 percent of the construction jobs in New York City, much higher than in the rest of the state (18 percent) and the nation (24 percent).
- Most construction companies (91 percent) employed fewer than 20 people and were responsible for one-third of the jobs in the sector in New York City.
- From 2010 to 2019, the average salary in the construction industry increased by 20.5 percent, faster than the overall private sector (19.5 percent). In 2020, while total wages in construction declined for the first time since 2010, the average salary increased by 4.0 percent.
- The city had a higher share of minority-owned construction firms (25 percent) than in the rest of the state (21 percent) and the nation (19 percent).
