Despite having the fourth-largest construction sector in the nation, New York state is one of five states that have not recovered from pandemic job losses in the construction sector and a full recovery may take some time as construction businesses in New York City continue to face a variety of challenges, including softer demand for office space, according to a report released today by State Comptroller Thomas P. DiNapoli.

“Spending on residential construction has rebounded since the pandemic, but nonresidential construction spending, especially in New York City, remains below 2019 levels and could continue to lag in the near future,” DiNapoli said. “A number of factors, many of them out of the city’s control, will affect future growth in the construction sector. For example, federal policy on tariffs and immigration may impact construction costs and the labor pool. There are steps the city could take to facilitate growth, and where appropriate, encourage the development of infrastructure and buildings to foster local economic growth.”

Construction employment in the greater New York City metropolitan region, which includes Long Island, the lower Hudson Valley and most of northern New Jersey, totaled 388,700 jobs in 2024, the highest of any metropolitan area in the nation and 4.4% of the national total.

New York state’s construction employment remains 4% (16,300 jobs) below its pre-pandemic level, the second lowest recovery among all states. The state’s construction sector would have fully recovered if not for New York City, where construction employment in 2024 was 11.3% (18,200 jobs) lower than in 2019. The city’s 143,100 construction sector jobs last year accounted for 36.7% of the state’s total construction jobs, down from a record high of 39.7% in 2019. Excluding New York City, construction employment in the state exceeded its 2019 level by 0.8 percent (1,900 jobs) in 2024.

According to the New York Building Congress (NYBC), nonresidential construction spending remains below pre-pandemic levels as market demands have changed due to hybrid work policies. Of the three categories of construction spending, nonresidential spending had the biggest decline (43%) in 2020. Despite three consecutive years of increases, by 2023, nonresidential construction was the only one still below 2019 spending, remaining 3.4% ($786 million) lower at $22.2 billion. Nonresidential spending was estimated to have fallen by 2.6% ($572 million) in 2024 as demand remains low.

Residential construction spending fully recovered from the pandemic by 2023, exceeding its 2019 level by 17.6% ($3.4 billion) to reach $22.8 billion, reflecting the high demand for housing and rising inflation. The NYBC, however, estimated residential spending dropped by 16% in 2024, partly due to the expiration of the 421-a tax abatement program. Residential spending is expected to improve following the adoption of a replacement program, 485-x, in April 2024. The 467-m program for the conversion of non-residential buildings into residential buildings may also improve the outlook.

After a drop at the outset of the pandemic, government spending on construction projects reached $23.3 billion in 2023, 18.1% higher than its 2019 level, and higher than both residential and nonresidential construction spending. The NYBC estimated that government spending increased in 2024 to a record high of $28.1 billion. In 2025 and 2026, the NYBC expects government spending will decline as planned government capital spending may be at risk if the federal government cuts support for local projects. Both the city and MTA have substantial capital commitment targets, but fiscal uncertainty could impact the timing of these projects.

DiNapoli’s report notes that the composition of the labor force and recent immigration enforcement actions by the federal government have the potential to disrupt ongoing projects and the labor pool for the industry as a whole. In 2023, immigrants held 61% of the jobs in the construction sector in New York City, a much higher share than in the rest of the state and the nation.

While the city plays an important role in spurring construction activity through capital spending, it also has a critical administrative and regulatory role through its Department of Buildings (DOB), which can impact the amount and pace of private construction activity. The number of DOB staff in these types of positions (i.e., project managers, plan examiners, inspectors and estimators) declined to 519 people in March 2024, from 662 in March 2021. As of March 2025, the number of staff in construction positions is over 21% below the March 2021 level, suggesting that building approvals may remain slower going forward.

DiNapoli’s report found:

• Construction spending in the city reached a record high of $68.2 billion in 2023, partly due to rising costs, exceeding the pre-pandemic peak in 2019 by 10%. The number of construction businesses decreased by 3%, or 479 firms, in 2024, the first annual decline since 2011.
• In 2024, construction was the fifth (out of 10) highest-paying employment sector in New York City, with an average salary of $95,800.
• The city’s construction sector accounted for $28.1 billion in economic activity in 2023, 3% higher than 2019. When adjusted for inflation, the construction share of the gross city product declined from 2.5% in 2019 to 1.8% in 2023 as other sectors, such as the information and professional and business services industries, took on significantly larger roles over the period.
• Around one-fifth of the jobs in the construction sector in New York state (20.7%) and the New York City metropolitan area (19%) were held by union members in 2024. Both shares were down significantly from 10 years ago (31.3% and 27.4% in 2014, respectively). For the five boroughs, the majority of construction workers are union members.
• The number of construction permits declined in 2023 and 2024, indicating that a return to pre-pandemic growth trends (4.5% annual average) has not yet occurred.

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The Construction Sector in New York City: Post-Pandemic Trends

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The Construction Industry In New York City: Recent Trends and the Impact of COVID-19

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