Although the construction market appears to have gotten off to a slow start in 2020, many trophy jobs are still breaking ground or in the planning stage.
As you can see in the Table below, some sizeable jobs in all regions of the country are making news. For instance, a $2.5-billion mixed-used project on the north side of Dallas will keep electrical contractors, engineering firms, and electrical distributors busy for the foreseeable future. According to www.dallasnews.com, The Central development will have 5-million sq ft of office, residential, hotel, and retail space. California is also seeing some mega-projects.
Google recently broke ground on a $450-million office building in Los Angeles and the $375-million Block 185@Green Water project in Austin, Texas. According to The Mercury News, Google will also be a tenant for a combined total of more than 1 million sq ft of office space in Silicon Valley, including its 595,000-sq-ft Googleplex under construction. The article said in total there’s 10 million sq ft of office and other commercial construction underway throughout Santa Clara County.
Silicon Valley isn’t the only area enjoying an active construction scene. In Atlanta, 26 major projects are in the pipeline, according to www.curbed.com, and Philadelphia has more office projects underway or in development than at any time since the 1990s. EC&M’s editors also found quite a few new solar, wind, and other green projects in the works, including Lucid Motors’ Arizona factory to build upscale electric vehicles (EVs) and Cree’s semiconductor plant in upstate New York that will produce components for EV batteries.
Despite these high-profile projects, the latest construction data points to a slowing market. Total construction starts slipped 6% from December to January to a seasonally adjusted annual rate of $759.2 billion, according to Dodge Data & Analytics. All three major categories moved lower in January — residential building starts fell 8%, nonresidential building lost 6%, and nonbuilding starts moved 2% lower.
With only one limited month of data available for 2020, Dodge Data & Analytics said it’s difficult to detect a 2020 trend. For the 12 months ending January 2020, total construction starts were 1% higher than during the previous 12-month period.
“Coming in slightly weaker than the previous month, January’s starts did little to change our view that construction starts will remain near their recent highs in 2020 even though they are likely to fall as the economy slows,” said Richard Branch, chief economist of Dodge Data and Analytics, in the press release.
Nonbuilding construction starts moved 2% lower in January, falling to a seasonally adjusted annual rate of $167.2 billion. The largest nonbuilding construction project to break ground in January was the $705-million extension of the South Central LRT in Phoenix. Also starting in January was the $575-million Permian Energy Center solar project in Andrews County, Texas, and the $550-million Wheatridge wind and solar project in Lexington, Ore.
For the 12 months ending January 2020, total nonbuilding starts were up 8% compared to the 12 months ending January 2019. On the plus side, environmental public works were up 4%, and the utilities/gas plants were up an impressive 116%. Nonresidential building starts fell 6% in January to a seasonally adjusted annual rate of $266.6 billion. However, if not for the start of a very large manufacturing project, nonresidential building starts would have declined 11%. In January, manufacturing starts more than doubled, while commercial building starts slipped 16%, and institutional starts fell 6%.
The largest nonresidential building project to break ground in January was the $475-million Cree semiconductor plant in Marcy, N.Y. Also starting was the $476-million BMO Office Tower in Chicago and the $400-million Husky Superior refinery in Superior, Wis.
On a 12-month total basis, total nonresidential building starts were less than one percentage point lower than they were in the 12 months ending in January 2019. Commercial starts were 5% higher, while institutional starts fell 3% and manufacturing starts were down 10%.
The largest multi-family structure to break ground in January was the $300-million Liberty on the River Apartment Tower in Philadelphia. Also starting in January was a $260-million mixed-used building on 10th Avenue in New York, as well as the $249-million Downtown Fifth Luxury Apartments in Miami.
About the Author
Jim Lucy
Editor-in-Chief, Electrical Wholesaling & Electrical Marketing
Over the past 40-plus years, hundreds of Jim’s articles have been published in Electrical Wholesaling, Electrical Marketing newsletter and Electrical Construction & Maintenance magazine on topics such as electric vehicles, solar and wind development, energy-efficient lighting and local market economics. In addition to his published work, Jim regularly gives presentations on these topics to C-suite executives, industry groups and investment analysts.
He launched a new subscription-based data product for Electrical Marketing that offers electrical sales potential estimates and related market data for more than 300 metropolitan areas. In 1999, he published his first book, “The Electrical Marketer’s Survival Guide” for electrical industry executives looking for an overview of key market trends.
While managing Electrical Wholesaling’s editorial operations, Jim and the publication’s staff won several Jesse H. Neal awards for editorial excellence, the highest honor in the business press, and numerous national and regional awards from the American Society of Business Press Editors. He has a master’s degree in communications and a bachelor’s degree in journalism from Glassboro State College, Glassboro, N.J. (now Rowan University) and studied electrical design at New York University and graphic design at the School for Visual Arts.