2014 Forecast Shows Gains, But No New Boom
After the dark days of the recent downturn, construction and engineering firms in the Southwest and across the country are experiencing the benefits of an industry that is trending positively.
The evidence is spread throughout the Southwest.
In Las Vegas, one of the metropolitan areas where the construction sector was hit hardest by the recession, it has been nearly three years since a new hotel-casino has opened. But Genting Group, a newcomer to Las Vegas, has purchased the abandoned Echelon steel skeleton and will develop a new mega-resort that is scheduled to begin construction in 2014.
Renovation projects as well as retail and entertainment projects have kept the industry afloat over the past couple of years and are also slated to continue in the future. Perhaps the most high-profile project is MGM Resorts and AEG's development of a $350-million, 20,000-seat sports and entertainment arena between New York-New York and the Monte Carlo.
In Arizona, the largest office development in the state's history will hit high gear along Tempe Town Lake. The 2,000,000-sq-ft, $300-million project will house a State Farm operations center.
Renovations and new construction at Sky Harbor Airport in Phoenix are expected to begin more than six years after they were initially proposed. The $500-million modernization plan will increase visitor flow and add a new concourse.
Boom Times Lurking?
While these projects are good news and a modicum of evidence that the industry and economy as a whole are no longer at the bottom of the downturn, the boom times are still lurking somewhere in the future.
"We think that 2014 might be the volume recovery year, but maybe not the profit recovery year," says Mark Minter, executive director of the Arizona Builders Alliance. "We are seeing work start to pick up, but as everybody tries to build backlog, margins are still historically low."
The situation is not much different across the Southwest.