The two sides are back at the table, trying to figure out ways to lower costs

by Theresa Agovino

Last year’s groundbreaking agreement between contractors and unions to bring down construction costs in the city reduced overall expenses by between 10% and 20%, slightly below the 15% to 21% originally projected.

With the deal due to expire at the end of March, the two sides are back at the table trying to figure out ways to lower costs further through a new agreement, says Louis Coletti, president of the Building Trades Employers’ Association, which represents contractors that use union labor.

The initial agreement, which included provisions for union work rule changes and slimmer contractor profit margins, is credited with stimulating more than $7.4 billion in construction activity and saving 25,000 jobs. Mr. Coletti says that the two sides are looking for more permanent changes this time, because it looks like it will be years before the city will see a construction boom matching the one that flourished earlier this decade.

The unions and contractors gathered in Florida last week at the industry’s annual meeting, and the mood was very different than it was in 2009, Mr. Coletti notes.

Last year, the recession was just beginning to have an impact on the construction industry, and there was more acrimony between the two sides.

“There is now a recognition that we are in a new economic cycle and there will have to be shared sacrifice,” says Mr. Coletti.

He declines to say what new measures the two sides are discussing, but he says he is confident that there’ll be a new agreement.