United States / Analyst Insights
Industry Implications of New York Infrastructure Investments

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by Nick Masters, Lead Industry Analyst
Oct 28 2019

Manufacturing and construction activity in New York is expected to pick up steam in the coming years due to forthcoming infrastructure investments outlined in the state’s $150.0 billion capital spending plan. New York’s ambitious infrastructure investments include the purchase of new subway cars, rail network expansions and bridge improvements.

New York state-specific industries such as Structural Metal Product Manufacturing (IBISWorld report NY33231) and Heavy Engineering Construction (NY23799) are expected to grow at faster rates than originally anticipated given the state’s recent announcement of expansive and specific transportation infrastructure improvements. In particular, the $54.0 billion 2020-2024 MTA Capital Program specifies 23 New York manufacturers and suppliers that it intends to contract with. Overall, New York’s manufacturing and industrial sectors are expected to grow at faster rates than their national counterparts given the state’s outsized spending on infrastructure improvements.

An emphasis on transportation infrastructure

New York’s infrastructure plan is well-diversified among transportation, utility and public facility improvements, thus providing for a steady stream of business across several state-specific industries. The largest impacts will be felt among industries reliant on transportation infrastructure. With a budget of $66.0 billion, improvements to transportation assets (i.e. airports, bridges, mass transit, etc.) account for the largest share of the state’s infrastructure program.

The $1.7-billion Structural Metal Products Manufacturing industry in New York is among the key beneficiaries of increased infrastructure investment. The industry derives nearly half its revenue (43.8%) from metal products related to transportation infrastructure. Relevant industry products include tunnel casings, bridge supports and concrete reinforcing bars. Over the four years to 2024, the MTA’s Capital Program has allocated $3.3 billion to bridge and tunnel improvements, which consequently spurred significant purchases of industry products.

State-specific supply chains and implicit challenges

Over the coming years, capital allocations will sustain operators within the Structural Metal Product Manufacturing industry in New York, in addition to the industry’s expansive supply chain. The MTA’s Capital Spending Program emphasizes that “89 percent of capital investments are sourced or performed in-state.” From an upstream perspective, the Iron & Steel Manufacturing (NY33111) and Industrial Machinery & Equipment Wholesaling (NY42383) industries will represent key suppliers for structural product manufacturers, whereas from a downstream perspective, industries such as Engineering Services (NY54133) and Heavy Engineering Construction will provide key services necessary for project completion. While some industries will benefit more than others from capital programs, the flow of capital through state-specific supply chains will lift New York’s industrial and manufacturing sectors overall.

However, capital allocations are often uneven over the four-year timeline. For example, $89.5 million is scheduled for improvements to Long Island Railroad bridges and tunnels in 2020, but this budget is slated to fall to $39.7 million for 2021. As expected, planned budget allocations are subject to change given the complexity and expansiveness of infrastructure improvements. In turn, while a robust infrastructure budget benefits New York’s manufacturing and industrial sectors, expected returns come with a degree of uncertainty and thus challenges for industry operators in the coming years.



Looking for related coverage on New York industry performance? Check out our previous Industry Insider article on divergent industry trends in New York and California!



Edited by Kieran Newton, Lead Editor
Infographic Design by Victoria Wolak, Lead Editor