2012 Southeast Construction Outlook
The prospect of three multi-billion-dollar casino resorts being added to Miami's mix of amenities—as has been proposed via a bill before the Florida legislature—is causing some high hopes.
"Any bill faces an uphill battle for passage," says Dyga. However, he adds, "You don’t have private firms invest the level of money that [has been invested] without them believing and having calculated the political and economic realities of the projects.
"Contractors are very optimistic and hopeful about the potential $6 billion in private investment being made," he continues. "And they are working hard to make sure politicians who pay lip service to helping the private sector ‘create jobs,’ actually put their money where their mouth is."
In Orlando, Mark Wylie, president and CEO of the Central Florida ABC, sees a steady-but-improving central Florida construction economy, with the majority of activity in a few select markets, such as schools, health care and multifamily.
Wylie notes further, "Hospitality and entertainment are experiencing strong recovery."
SunRail, the $1.3-billion Central Florida commuter rail project approved by Gov. Rick Scott (R) last summer, could start construction this year, and has already started to generate related development activity. Rida Development Corp. has expressed its commitment to a roughly $200-million transit-oriented development project in downtown Orlando. Also, Adventist Health Systems has committed itself to a roughly $800-million "health village" consisting of retail, medical offices, commercial space and housing.
Georgia: Big 2012 Jump Forecast Like the other Southeast states, the pace of Georgia contracts activity started off 2011 slowly, but picked up the pace considerably in the second half of the year, according to McGraw-Hill Construction.
In fact, the overall value of new Georgia construction contracts improved for the first time in five years during 2011—and in fairly resounding fashion. According to McGraw-Hill, the state's 2011 construction contracts totaled roughly $12.2 billion overall, a 13 percent gain over the previous year.
McGraw-Hill thinks Georgia has a good thing going, and expects more for 2012—quite a bit more, in fact. The company’s economists project a 63 percent jump in the state’s overall construction figure, thanks mostly to some large power projects that are expected to move ahead. Compared to 2011, when total construction tallied $12.2 billion, the coming year could deliver an estimated $19.9 billion in new contracts.
With the residential and nonresidential categories expected to deliver 19 percent and 9 percent increases, respectively, the math requires a major jump in the nonbuilding sector. McGraw-Hill Construction economists expect this category of construction to deliver more than twice the volume of new contracts in 2012, as compared to 2011, when an estimated $3.2 billion in new projects moved ahead. Again, this sector's expected percentage gain is due to the energy contracts.
Despite McGraw-Hill's rosy projection, builders are still facing a challenging market that remains mostly "flat," says Bill Anderson, president of the ABC of Georgia, in Atlanta. He cited ABC's market watch tool, the Construction Backlog Indicator, which remained steady at about eight months of backlog in the latter half of 2011, which he says denotes a flat market.