For several years now, the four-state Southeast construction market has been steadily gaining momentum. Some areas, such as South Florida, have experienced stronger growth than others over that time. But in multiple metro areas across Florida, Georgia and the Carolinas, contractor backlogs are growing, and lists of bidders for individual projects are shrinking.
"Contractors seem a lot happier and more positive about the future," Dave Simpson, interim president and CEO of the Carolinas chapter of Associated General Contractors, Charlotte, told ENR Southeast recently. "Folks are starting to get pickier about the jobs they chase. But I'm hearing more concerns about the labor shortage."
While the labor crunch and the increase in building activity are likely to be the overarching issues facing the Southeast's construction industry in 2015, several other trends will also play an important role. ENR Southeast has singled out five Southeast construction trends that are worth keeping an eye on during the coming year.
Industry's bellwether will gain further momentum across the region
The housing sector remains construction's leading bellwether, and it appears poised to deliver more good news to Southeast contractors in 2015. For instance, Dodge Data & Analytics—formerly McGraw Hill Construction—is forecasting roughly $48.7 billion in new housing contracts in the Southeast, with more than $39.1 billion coming from single-family construction. According to Dodge, all four states will see more housing starts during the coming year, with an overall regional gain of roughly $3.6 billion compared with 2014. The resurgence of single-family activity will be evident in Orlando, for example, says Dodge, which predicts that more than $4 billion of the metro area's estimated $4.7 billion in housing starts will come from the sector.
Atlanta’s Construction Work Force
The area's resurgence will put added pressure on builders to staff projects adequately
The labor shortage was a key trend last year and will likely only grow in significance during 2015. Contractors across the region will be affected, but Atlanta may prove to be "ground zero." The National Football League's Falcons and Major League Baseball's Braves each are ramping up roughly $1-billion construction efforts. Bill Anderson, president of the Georgia chapter of Associated Builders and Contractors (ABC), says the crunch will be a "major issue."
"Residential trade contractors are already feeling the pinch, particularly in areas such as drywall and framing," he says. "In some cases, contractors are finding it difficult to get specialty contractors to bid the work due to manpower concerns and not being able to fulfill project needs." Also, Anderson adds, "Tradesmen are in great demand, resulting in higher turnover due to higher wages offered by competing sectors."
No other Southeast metro area can boast a similar lineup of high-rise projects.
The list of South Florida's high-rise towers that are planned or under construction is already impressive—and still growing. For starters, Coastal Construction and Tishman are beginning work on the $430-million, 1,000-ft-tall SkyRise Miami observation tower next to Biscayne Bay. In Miami's Brickell district, Tutor Perini is building the 80-plus-story Panorama Tower, and Swire Properties is progressing on its $1-billion-plus Brickell City Centre mixed-use project.
But the Federal Aviation Administration reportedly is trying to cool some of this high-rise fever. According to the New Times of Miami, the FAA wants four planned projects—including a more than 1,000-ft-tall structure at Brickell City Centre—to be scaled down.