Building Congress helps members meet challenge of success

Real Estate Weekly, July 25, 2001 by Richard T. Anderson

We stand at a crossroads in the design, construction and real estate industry today. Having just experienced nearly the greatest building boom of New York City's history, many are wondering if the boom is soon to go bust. Increasing volatility on Wall Street, soaring gasoline prices and the threat of a looming energy shortage are combining to give our industry and others doubts about the ability of the City to sustain growth and prosperity in the near and long term. But not all indicators are gloomy. In fact, many point to continuing robust activity over the next several years. Furthermore, the industry has a long history of working together with management, labor, and government to support the economic growth of the City and thereby support a healthy environment for improved infrastructure, housing, schools and office development.

Citywide economic leadership has always been the hallmark of The New York Building Congress. Never has that leadership been more effective than it is today thanks to the continued participation and support of our diverse membership of leading architects, engineers, contractors, developers and labor unions. Also crucial to our organization's strength are the prominent industry associations that serve the professionals who build and maintain this great City. It is our partnership with these associations, and our collaborative relationship with government, that forms the bedrock of what has become an increasingly effective and powerful coalition.

A perfect example of this collaboration is the recently released report Electricity Outlook: A Matter of Urgency. Four other organizations joined the Building Congress to research what would be required to ensure that the shortages and power interruptions now commonplace in California would not happen here. The report concluded that power plant approvals must be expedited to get needed additional generating capacity within the City on line within the next two years, before the energy gap reaches crisis proportions. Furthermore, it encourages greater use of conservation and alternative technologies to reduce our overall energy usage and maximize the amount of power now available to the City. The report's conclusions have since been supported in others issued by organizations including the New York State Independent System Operator (NYISO) and are now an important part of the public debate of solutions to our energy needs.

Another important initiative which sprung from requests of industry organizations is the Building Congress report Construction Outlook; a publication released in 2000 that forecasted construction activity through 2003. This report indicated that, although construction activity, continues to rise each year, not enough is being done to ameliorate worsening labor shortages and infrastructure deficiencies.

Although Wall Street's recent volatility has heightened economic pessimism, an update of Construction Outlook now underway indicates no overall slowdown in construction activity now or over the next several years. A review of capital budgets shows construction employment and spending are at 25-year highs and that the activity covers commercial, residential, institutional and government sectors. And none of the available data indicates a slowdown is on the horizon.

Despite these re-assuring indicators, sometimes perception can become reality. To supplement these statistics, the Building Congress commissioned an informal survey of architectural and engineering firms to help gauge perceptions of the health of the industry. All firms spoken with agreed that: the number of requests for proposals has not lessened; publicly funded projects are strong through 2002; and, private work is still heavy. There were perceptions, however, that developers are being more cautious, that speculative building is lessening, and that persistent "talking down" of business activity or of the economy can lead to a self-fulfilling prophecy.

So the good news for the industry does pose some important challenges. The projected shortfall in construction employment in the City is expected to reach 30,000 by 2003. The Building Congress supports efforts by the Building Trades Employers' Association and others to encourage students to enter the skilled trades and to promote the industry's contributions to the City's continuing prominence.

Another area of concern relates to infrastructure investment. While public construction spending is undoubtedly rising, the increase is not keeping pace with private-sector construction. Our subways, roads and bridges, schools and neighborhoods are becoming more and more crowded. In addition to important maintenance expenditures, we need to invest more in new subways, schools and affordable housing to support the needs of a growing City. The choice is simple; either we "build for growth" or face diminished prospects.

The Building Congress role of leadership on broad economic issues such as energy and transportation investment complements the efforts of other organizations on workforce development, workplace safety, and job creation. By sharing our strengths we can achieve our common goal to continue the economic boom and the quality of life for all who live, work or recreate in New York City.