Florida 2010 Outlook
Florida: Residential Rises? The previous year was definitely a stormy one for firms busy in the Sunshine State. McGraw-Hill Construction’s latest estimate for Florida’s 2009 construction activity predicts an 18% overall decline. This is the result of a 27% downturn in the state’s nonresidential projects as well as a 36% further retrenchment in the residential market. Fortunately for Florida firms, the nonbuilding sector buoyed the overall number somewhat, growing by a significant 35% during 2009.
For 2010, McGraw-Hill predicts a 6% overall increase in new contracts, for a total construction figure of about $27.9 billion.
A major factor in this positive overall outlook is McGraw-Hill’s prediction that residential will finally turn up. The company forecasts Florida’s housing-related contracts to increase by 14% overall in 2010, resulting in a roughly $8.9-billion market for new work.
Though that percentage increase may sound positive, it should be noted that the projected 2010 dollar volume is still well below the state’s recent historical levels. For example, residential generated $12.3 billion in Florida contracts in 2008, and as much as $41.7 billion in 2006.
As they will for the Southeast as a whole, Florida’s nonresidential contracts will continue to decline in number during 2010. Here, McGraw-Hill Construction sees a 5% decline, for a $9.5-billion tally.
That decline is moderate compared to the steep nosedive this sector experienced in 2009. According to McGraw-Hill’s latest estimates, Florida’s nonresidential contracts fell 27% overall last year, with a whopping 51% drop in the commercial and industrial subcategory.
Commercial and industrial contracts are now projected to decrease by just 2% in 2010, taking this category down to just below $3.5 billion. McGraw-Hill Construction says the value of institutional building contracts will decline, too, by 7%, for a $6-billion total.
The nonbuilding market should be exceedingly positive in 2010, however. This sector, which grew by 35% in 2009, is expected to again achieve a double-digit percentage increase during the coming year. McGraw-Hill anticipates an 11% improvement to nearly $9.5 billion.
Public works will drive the lion’s share of the improvement in nonbuilding. This category is expected to escalate by 38% in 2010—after a 12% uptick in ’09—and deliver about $8.8 billion worth of new contracts to Florida firms.
On the downside, the electric utilities sector—a historically up-and-down market—is expected to retrench considerably in 2010. Its $707-million forecast is about 67% lower than the $2.2 billion in contracts that moved forward during 2009.
|Millions of Dollars||2003||2004||2005||2006||2007||2008||Forecast 2009||Forecast 2010||2008-09 % Chg||2009-10 % Chg|
|Commercial & Industrial||5,024||6,385||6,613||6,922||10,251||7,170||3,541||3,463||-51%||-2%|