{"id":9856,"date":"2022-06-09T14:04:00","date_gmt":"2022-06-09T21:04:00","guid":{"rendered":"https:\/\/essential.construction\/news\/?p=9856"},"modified":"2022-06-09T14:04:00","modified_gmt":"2022-06-09T21:04:00","slug":"texas-florida-boost-construction-starts-in-the-south","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/texas-florida-boost-construction-starts-in-the-south\/","title":{"rendered":"Texas, Florida boost construction starts in the South"},"content":{"rendered":"

This story is the fifth in a series looking at the health of the construction industry<\/a> in regions throughout the country.<\/em><\/p>\n

Total construction starts in the South region increased 13% in 2021, similar to the national start growth of 14%, according to a Dodge Data & Analytics construction outlook webinar.<\/p>\n

\u201cContrary to the outmigration we\u2019re seeing in the Northeast and the Midwest, the South has seen net migration into the region over the past two years,\u201d said Sarah Martin, senior economist at Dodge, during the webinar. \u201cConstruction activity has remained steady,” she said, noting that residential activity was driving the momentum.\u00a0\u00a0<\/p>\n

The largest nonresidential sectors in the South region, which consists of Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia, include warehouses and education facilities, according to Dodge data.<\/p>\n

For 2022, Dodge forecasts warehouse starts in the South region to hit $21.51 billion, a 16% increase from a year ago.<\/p>\n

But the warehouse sector is beginning to slow its acceleration. Amazon, one of the largest users of U.S. industrial space, recently announced a cutback on its e-commerce operations<\/a>. Dodge Chief Economist Richard Branch said that decision will affect construction activity in the warehouse sector, particularly after 2022.<\/p>\n

\u201cWe think the warehouse market grows this year but then once we get into 2023 and throughout our five year forecasts, the warehouse sector will start to pull back,\u201d said Branch. \u201cNot aggressively, but we will start to see a decline in warehouse construction moving forward.\u201d<\/p>\n

In the South region, the 16% warehouse increase forecasted this year is just half of 2021’s pace, when warehouse starts jumped 31%. Even in 2019, the year before the pandemic, the warehouse sector grew 39% from its 2018 level, according to Dodge data.<\/p>\n

Dodge forecasts education starts in the South, the largest sector of the region, to reach $25.56 billion in 2022, a 18% increase from a year ago.<\/p>\n

Martin said it\u2019s likely K-12 construction and colleges will have more confidence to invest in their infrastructure this year as uncertainty over the pandemic recedes.<\/p>\n

For example, in November the Fort Worth district in Texas approved a $1.2 billion bond to renovate<\/a> all the district\u2019s middle schools and build new elementary schools. There are similar measures being passed throughout the region, said Martin.<\/p>\n

\u201cActivity is forecast to pick up pretty strongly this year,\u201d said Martin.<\/p>\n

Dodge forecasts South manufacturing starts to reach $12.82 billion in 2022, a 3% increase from a year ago. Across other regions in the U.S.<\/a>, starts in the sector are increasing due to a renewed push to bring back more manufacturing plants to the U.S.<\/p>\n

For example, four of the 10 largest commercial projects over the last 12 months in the South region fall under the manufacturing umbrella. That includes the $1.5 billion U.S. Steel Flat-Rolled Mill at Big River in Osceola, Arkansas and the $1.3 billion Methanex Methanol Plant in Geismar, Louisiana.<\/p>\n

\n
Largest South starts over last 12 months<\/h6>\n

Project
\nType
\nLocation
\nStart month
\nValue
\nVenture Global LNG Export Facility
\nGas
\nLouisiana
\nOctober 2021
\n$8.5 billion
\nU.S. Steel Flat-Rolled Mill at Big River
\nManufacturing
\nOsceola, Arkansas
\nFebruary 2022
\n$1.5 billion
\nMethanex Methanol Plant #3
\nManufacturing
\nGeismar, Louisiana
\nOctober 2021
\n$1.3 billion
\n1 Southside Park Mixed-Use
\nApartment
\nMiami
\nDecember 2021
\n$710 million
\nDanimer Scientific\u2019s Plant Expansion
\nManufacturing
\nBainbridge, Georgia
\nDecember 2021
\n$700 million
\nRobley Rex VA Medical Center
\nHospital
\nLouisville, Kentucky
\nNovember 2021
\n$693 million
\nJ.M.\u00a0Smucker Uncrustables Facility
\nManufacturing
\nMcCalla, Alabama
\nJanuary 2022
\n$550 million
\nLA1 Asphalt Concrete Repair Ph II
\nBridge
\nGolden Meadow, Louisiana
\nJanuary 2022
\n$464 million
\nRiverRenew Tunnel System Project
\nSewage
\nAlexandria, Virginia
\nOctober 2021
\n$454 million
\nLoews Hotel & Convention Center Ph II
\nHotel
\nArlington, Texas
\nOctober 2021
\n$445 million<\/p>\n

SOURCE: Dodge Data & Analytics<\/p>\n<\/div>\n

But in the South region, that 3% percentage growth is a significant drop from last year, where manufacturing starts in the region jumped 38% from its 2020 level.<\/p>\n

That\u2019s largely due to materials prices and continued labor shortages in the region, said Martin. Additionally, high inflation is boosting the percentage growth of the sector. In real dollars, Martin said the sector is actually contracting.<\/p>\n

\u201cLabor shortages and supply chain volatility are likely to prevent substantial growth this year,\u201d said Martin. \u201cBut when you take out that inflation measure, [percentage growth is] going to fall out to about negative 15%.\u201d<\/p>\n

Texas led the South region in 2021 with $114.13 billion in construction starts, a 7% increase from a year ago.<\/p>\n

For the first four months of 2022, nonresidential activity in Dallas-Fort Worth jumped 27%<\/a>. In Austin during the first four months of 2022, nonresidential activity jumped 37%<\/a>.<\/p>\n

Florida ranked second in the South region with $88.12 billion in construction starts, a 22% increase from a year ago.<\/p>\n

For the first four months of 2022, nonresidential activity in the Miami area climbed 19%<\/a>, while nonresidential activity in Tampa increased 58%<\/a>.<\/p>\n

West Virginia and Mississippi posted the largest drop in construction starts in the South region in 2021, falling 16% and 15% from 2020, respectively, according to Dodge.<\/p>\n

Dodge expects four states in the South region to grow their GDP at a faster rate than the national average of 3.5% in 2022. Delaware leads the region with 5.8%, while Texas and Florida, the two largest construction start states, follow with 5.4% and 4.5% projected growth, respectively. Dodge projects Oklahoma to grow its GDP by 4.4%.<\/p>\n

Mississippi and Kentucky round out the region with a projected GDP growth of 1.7% and 1.5%, respectively.<\/p>\n

\n
State GDP growth of South region<\/h6>\n

State
\n2017
\n2018
\n2019
\n2020
\n2021
\n*2022 projection
\nDelaware
\n-3.5%
\n1.5%
\n4.1%
\n-3.4%
\n3.7%
\n5.8%
\nTexas
\n2.7%
\n3.9%
\n3.2%
\n-2.9%
\n5.6%
\n5.4%
\nFlorida
\n3.6%
\n3.3%
\n3.0%
\n-2.8%
\n6.9%
\n4.5%
\nOklahoma
\n0.6%
\n1.6%
\n1.7%
\n-4.9%
\n2.2%
\n4.4%
\nGeorgia
\n3.6%
\n2.7%
\n3.5%
\n-3.9%
\n5.8%
\n3.2%
\nNorth Carolina
\n2.8%
\n1.5%
\n2.1%
\n-2.9%
\n6.7%
\n3.2%
\nSouth Carolina
\n2.3%
\n2.6%
\n2.3%
\n-1.9%
\n5.9%
\n3.1%
\nLouisiana
\n2.3%
\n1.1%
\n-0.1%
\n-5.8%
\n2.4%
\n2.8%
\nTennessee
\n2.7%
\n1.3%
\n2.0%
\n-3.9%
\n8.6%
\n2.8%
\nDistrict of Columbia
\n1.0%
\n2.4%
\n0.9%
\n-2.1%
\n2.8%
\n2.8%
\nVirginia
\n1.5%
\n2.4%
\n2.0%
\n-2.8%
\n4.0%
\n2.7%
\nWest Virginia
\n2.1%
\n2.3%
\n-0.8%
\n-3.9%
\n4.0%
\n2.6%
\nMaryland
\n1.8%
\n0.5%
\n0.3%
\n-4.5%
\n3.2%
\n2.5%
\nAlabama
\n1.7%
\n1.6%
\n1.3%
\n-3.2%
\n4.1%
\n2.3%
\nMississippi
\n0.4%
\n-0.5%
\n0.4%
\n-1.8%
\n4.4%
\n1.7%
\nKentucky
\n1.0%
\n1.2%
\n1.7%
\n-3.0%
\n4.7%
\n1.5%<\/p>\n

SOURCE: Dodge Data & Analytics<\/p>\n<\/div>\n

This item was originally posted here: Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"

This story is the fifth in a series looking at the health of the construction industry in regions throughout the … Read more<\/a><\/p>\n","protected":false},"author":0,"featured_media":9857,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1066,457],"tags":[],"class_list":["post-9856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-posts","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/9856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=9856"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/9856\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media\/9857"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=9856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=9856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=9856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}