Construction Trends by Region
2018 is shaping up to be a strong year for construction, driven in part by these regional trends.
The overall outlook for construction in 2018 is bright. But different trends are driving growth in different geographic areas. Here’s what 2018 may bring to hot spots around the country.
Factories and single-family homes in the South
In a report from Old Caste Business Intelligence, The South was predicted to experience the biggest growth rates in construction in 2018. Chalk it up in part to the local demand for single-family homes as well as some hurricane-repair work.
While single-family housing starts dipped in December, overall, starts were up 8.5 percent in 2017 nationally. And a Kiplinger forecast predicts new home sales will be stronger this year.
In addition, the South will likely continue to be a magnet for manufacturers of all kinds of goods, including automobiles. Manufacturers love the South because trade unions hold little sway there, which keeps wages down, and an experienced workforce has found itself migrating to warmer weather. Add to that cheap land and states willing to fork over large incentive packages, and it’s little wonder the South has become home to big auto industry brands such as Toyota and Mazda (in Atlanta) and appliance manufacturer LG (in Tennessee). In October 2017, Canadian paper product maker Irving Consumer Products broke ground on a $400 million factory in Macon, Georgia.
Data center construction in the Mid-Atlantic
The data center market is growing fast, according to Technavio analysts, and the
Mid-Atlantic region is home to the world's largest such market, with its epicenter in Loudoun County, Virginia. Although data center investment is taking place in other areas of the country, there's no sign that the biggest companies are ditching Virginia anytime soon.
The state offers data center owners a sales tax exemption for all computer equipment purchased and leased there until 2035. Northern Virginia is also a popular choice for data centers because of its proximity to population centers, reasonable electricity costs and access to high-quality fiber networks and water, which is used to cool equipment.
Storm repair in coastal states
Thanks to the string of storms that caused flooding on the West and East Coasts and along the Gulf of Mexico, these areas will spend 2018 and beyond rebuilding, stressing an already-limited supply of construction workers.
Many areas will not be satisfied with building exact replicas of what was lost. Instead, local and state agencies are thinking about resiliency and prevention. For example, Houston's Harris County is pushing for the federal government to pay for a $61 billion program that local officials hope will reduce the level of flooding they saw with Hurricane Harvey. The program includes massive drainage and levee projects that will keep water out but also a buyout of properties in flood zones.
Boston officials, with a similar goal of keeping water out and driven by severe winter storms that flooded popular business and tourist districts, are floating the idea of building a barrier in Boston Harbor that would keep storm surge to a minimum.
Housing and transit on the West coast
The West Coast, along with the South, continues to dominate the housing market. Expect single-family homes to drive growth there in 2018 as part of the overall construction boom happening in West coast cities such as Seattle and Portland and in the Bay Area of California as companies seek more space for their employees to work and live.
Los Angeles, Seattle and the Bay Area are also among the localities sinking considerable dollars into transit construction projects, including an expansion of the Purple Line Subway in Los Angeles, an expansion of the Bay Area’s heavy rail system and a host of light rail extensions in Seattle.
Kim Slowey is a writer who has been active in the construction industry for 25 years and is licensed as a certified general contractor in Florida. She received her BA in Mass Communications/Journalism from the University of South Florida and has experience in both commercial and residential construction.
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