Dim outlook for city construction jobs

New York City’s construction industry is still struggling to fully recover from the pandemic, a recent report from the state comptroller’s office found.

As of last year, 143,000 workers were employed in the construction sector, meaning that there were 11.3 percent, or 18,200 fewer jobs in the industry in New York City compared with 2019. As a result, that decline contributed to a 4-percent drop in construction employment statewide. If the city is removed from the data, the number of construction jobs across the state would have grown by 0.8 percent since 2019, the report notes.

Construction jobs in the city accounted for 36.7 percent of the state’s construction jobs, down from 39.7 percent in 2019.

Nationally, the construction industry recovered pandemic job losses by 2022. One reason the city has struggled to recover is because the industry is more heavily reliant on nonresidential projects than the rest of the country.

The report found that the city faces several challenges to fully recover construction employment levels. Although construction spending in the city reached a record high of $68.2 billion in 2023, much of the increase in spending was due to rising material costs.

The Trump administration’s immigration policies could also present a challenge to the construction industry’s ability to recover here. About 61 percent of construction workers across the city were immigrants, a much higher share than in the rest of the state (21 percent) or country (24 percent).

“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,” state Comptroller Thomas DiNapoli said in a statement accompanying the report. “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.”

Comptroller: Fill DOB positions

Although many of the challenges facing the construction industry are outside of the city’s control, the comptroller noted that the city can take steps to speed up the pace of construction and permitting by filling vacancies at the Department of Buildings. In March 2024, there were 519 workers employed at the agency in construction-related positions, down from 662 in March 2021. It also found that it took more than eight days longer for permit filings to be approved in June 2024 compared with three years earlier, a 70-percent increase.

Notably, the percentage of construction workers in the state who were unionized in 2024 declined sharply compared with a decade earlier, going from 31.3 percent to 20.7 percent. The majority of construction workers in New York City, however, were union members.

Government spending on construction projects has helped the city’s construction industry stabilize, totaling $23.3 billion in 2023, which was 18.1 percent higher than in 2019. The MTA’s 2025-2029 capital plan also calls for a record high $68.4 billion in capital investments. But, the report noted, “planned government capital spending could be at risk if changes in federal support for local projects were to occur.”

Although residential spending has rebounded since the pandemic, the demand for commercial real estate in the city has declined since then as more people work from home. According to real estate company Cushman & Wakefield, Manhattan’s office vacancy rate was 22.6 percent during the first quarter of 2025, compared with a historical rate of 13.7 percent.

Even though residential construction spending had fully recovered from the pandemic by 2023, spending in the sector dropped by 16 percent in 2024 after the expiration of the 421-a tax abatement program. 

Overall, while the report found that the city’s construction industry to regain jobs during the year following the pandemic, “it is far from fully recovered and may not reach pre-pandemic levels for the next several years given significant risks ahead.”