2013 Southeast Forecast: Rebound to Continue
Construction contract activity in the Southeast states of Florida, Georgia and the Carolinas will likely parallel national trends during 2013 while at the same time showing significant deviations from the bigger picture, according to economists with McGraw-Hill Construction and local industry officials.
Florida's volume of new construction starts, for instance, should build upon the momentum that began during 2012 to considerably outpace the modest growth predicted for the national market.
Also, as a result of significant increases in overall new starts in 2012 due to two nuclear power projects beginning construction last year—collectively valued at $17 billion by McGraw-Hill—the states of Georgia and South Carolina will most likely incur major overall declines in 2013, even while most building markets in both states improve.
At the same time, each of the Southeast states will experience considerable improvement in residential construction, mirroring the forecast for the nation as a whole.
"Housing is definitely on the comeback, even in the hard-hit state of Florida," says Kim Kennedy, manager of forecasting for McGraw-Hill Construction, which publishes Engineering News-Record. "This is important since a recovery in housing could help to spur the recovery in nonresidential building as well."
National Outlook: Modest
On a national level, McGraw-Hill Construction is essentially forecasting continuing, but modest growth in the overall value of new contracts. (The company's figures reflect the cumulative total value of new construction contracts at the time of award.)
According to the company, total U.S. construction starts should total roughly $483.7 billion in 2013, or 6% better than in 2012, which in turn represented a 5% gain over the year prior.
In announcing the 2013 outlook, Robert Murray, McGraw-Hill Construction's vice president of economic affairs, sounded like he could have been describing the Southeast's market conditions when he summed up the national situation this way: "The modest gains experienced during the past two years have in effect produced an extended bottom for construction starts, in which the process of recovery is being stretched out."
Nationally, McGraw-Hill Construction expects residential contracts to show the most improvement, increasing by 22% in volume and totaling about $193.4 billion in cumulative value.
Commercial construction should gain momentum, too, with this sector's 2013 starts expected to total about $55.9 billion nationwide, for a 12% gain.
Regional Forecast: Mixed, Cautious
In the Southeast, despite predictions of increased construction activity at the state and local levels, sources contacted for this story remain mostly tentative in their estimations for the coming year.
Phil Southerland, president with KBR Building Group, Charlotte, foresees slow growth for the start of 2013, with the Southeast gradually building increased momentum as the year continues.