When it comes to the status of construction contract activity in the Sunshine State, the current consensus seems to be: things actually could be worse.
For example, according to the latest news from McGraw-Hill Construction, publisher of Southeast Construction, the volume of new contracts signed during May for future construction activity was slightly more than $2.3 billion, or about 16% lower than during May 2008, when overall contract activity totaled roughly $2.8 billion.
Residential is still in a nosedive, of course. This market recorded only $546.9 million in new contracts during May, or less than half of the preceding May's total of more than $1.1 billion. And for the year-to-date, residential is down 53% compared to 2008's pace, and nonresidential is down 36% overall.
On the bright side, nonbuilding contracts--which include infrastructure projects--chalked up a 40% gain in May.
McGraw-Hill Construction economist Jennifer Coskren, who authored the report, summarized the midyear update in an article entitled, "Stimulus Funds Prop Up Florida Market," that appeared recently on ENR.com, complete with numerous charts about Florida's various construction categories.
The picture Coskren paints is not pretty. In the report, she writes: "The crisis in Florida’s construction markets will continue for the fourth consecutive year. By the end of 2009, Florida’s starts are expected to total $27.8 billion, just 40% of the last peak in 2005."
That $27.8 billion total is significantly below McGraw-Hill Construction's original prediction of about $32 billion in new starts for Florida during 2009.
Coskren adds: "Overall, Florida is facing an increasingly difficult economic environment in 2009, and the risks will remain pervasive. State budget troubles, further pain in housing markets, slower job growth and less accommodating credit markets will conspire to keep construction on its downward path. For all of 2009, total starts will ease another 13%, though the risk is strong that construction could fall more steeply."
It's not all gloomy, though. Florida's nonbuilding market--which includes roads, highways, water, sewer and other infrastructure work--is experiencing a strong boost from federal stimulus dollars.
For example, Coskren writes: "2009 is expected to be a strong one for highway and bridge construction. The federal stimulus dollars, in addition to the beginning of the $1.8 billion I-595 reconstruction in Broward, are behind this much-improved outlook for highway work. In total, bridge and highway construction value will rise 41% this year to $3.5 billion."
Overall, McGraw-Hill Construction is now forecasting that Florida's nonbuilding market should total nearly $9.5 billion in new contracts during 2009, well up from last year's disappointing $6.3-billion total.
And the beat goes on....Stay tuned for more market news from Southeast Construction and McGraw-Hill Construction.