Halfway* through 2012, it appears that the Southeast's two largest construction markets are heading in opposing directions, with Miami picking up its old boom-town ways, and Atlanta struggling to find a way forward. That's the situation, at least, according to the latest data from McGraw-Hill Construction, and recent news reports.
Let's start with the data from McGraw-Hill Construction, publisher of Dodge. (Also publisher of ENR Southeast.) According to the company, the building markets of the "Miami" metro area—what Dodge calls the area consisting of Dade, Broward and Palm Beach counties—are about 47% percent ahead of 2011's first-half pace. (For its metro reports, McGraw-Hill Construction only includes data for the nonresidential and residential building markets; infrastructure-related data is only included for statewide reports.)
Plaza Construction Group Florida, Miami, recently announced it was working on an expansion of the Dadeland Mall for Simon Property Group, Indianapolis. The contractor also announced several other Miami-area contracts of similar value. (Image courtesy Plaza Construction Group Florida)
Atlanta, on the other hand, is 12% behind 2011's pace, says McGraw-Hill Construction. And not gaining momentum. McGraw-Hill's most recent report covering June data, for instance, showed a 65% drop in the volume of new construction contracts, compared to the same period of a year ago, and a 12% decline in residential projects, for a 52% decrease overall.
Looking inside the numbers reveals similarities and differences. For starters, in both cities, residential is the strongest market. Miami's residential market—which not that long ago experienced an arguably historic boom and, more recently, a nearly-as-historic decline—is now 94% ahead of last year's pace.
Meanwhile, up north, Atlanta's residential market is 42% ahead of last year's pace. In fact, through June, Atlanta-area contractors have moved forward on an estimated $1.2 billion worth of new housing contracts, which slightly edges out Miami's mid-year tally of just over $1.1 billion.
Nonresidential is the difference-maker, though. Through June, Miami's nonresidential market is 19% ahead of 2011, while Atlanta's is estimated to be 38% behind last year's pace. Percentage swings aside, Miami's nonres total through June is nearly $1.2 billion, while Atlanta's is estimated at nearly $1.1 billion.
Despite the markets being nearly equal in volume, the competing cities' divergent fortunes is producing different attitudes. In Atlanta, contractors have recently decried the commercial building market as "nearly nonexistent." Meanwhile, down in Miami, contractors are starting to crow again about their big, high-profile construction contracts.
Further, to hear Miami contractors like Tom Murphy of Coastal Construction Group and Brad Meltzer of Plaza Construction Florida tell it, the recent uptick in new contracts may be just the beginning of yet another unprecedented construction period. They may be right. Apartments, condominiums, luxury hotels and even retail projects are starting to move forward throughout the South Florida area. Of course, only time will tell if their predictions prove accurate.
In Atlanta, meanwhile, a penny tax that would've generated about $8 billion for area transportation projects—with about half that amount going to transit—was shot down by area voters. At roughly the same time, though, prospects for a multi-modal passenger terminal project planned for Atlanta—and estimated at about $1.2 billion overall—received a recent boost. But that seems to symbolize the Atlanta metro's current state: just waiting and hoping for a rebound.
What do you think? Does your company work in either the Miami or Atlanta areas? What are you seeing out there? Let us hear from you!
*Based on six months of construction data for the Miami and Atlanta metros.