Northwest Builders Riding Crest Of Growth Wave
Construction activity in the Northwest remains solid, according to industry leaders. Construction employment for Oregon and Washington is up year-over-year as well, according to the U.S. Bureau of Labor Statistics and the Associated General Contractors. Construction employment in Washington increased by 6.3%, or 10,900 jobs, between May 2015 and May 2016 on a seasonally adjusted basis.
The construction sector in Oregon led the state’s major industries in employment growth between May 2015 and May 2016, adding 8,100 jobs, an increase of 9.9%. Alaska, however, lost 900 jobs between May 2015 and May 2016.
Population growth in Seattle and Portland is driving the construction upswing. “We just passed the 70,000 mark of people living [in downtown Seattle], with 50,000 or so working there,” says James Sido, senior media relations manager for the Downtown Seattle Association.
Hotel construction has surged in both cities. In Seattle, while fewer than 700 rooms were added in the downtown corridor from 2011 through the first half of 2016, 1,471 rooms are scheduled for completion in 2017, and 1,468 in 2018.
Portland added only 500 rooms to the city’s inventory in the last five years, according to a May 2016 report prepared by Heritage Consulting Group for the Portland Business Alliance. But Heritage estimates that 1,600 hotel rooms will come on line in the next two years.
Seattle’s growth has been sparked by Internet giants Amazon and Google, says Chris Toher, executive vice president and general manager of Skanska’s Seattle office. He says that Google is occupying 1 million sq ft of office space in the Seattle market and Amazon’s square footage count is approximately 8 million sq ft.
“Over the last three years, we’ve seen a tremendous amount of growth in the residential housing industry,” Toher says. “The commercial office market is pretty hot right now, and we’re also seeing a lot of K-12 [projects].”
Toher anticipates that health care building will expand. Also, there are projects underway for the Port of Seattle and in the roads and bridges arena.
Many of these issues are reflected in the first ENR Northwest contractor’s survey compiled in several years. The results are reported on the following pages.