Optimistic Indicators for the Construction Industry
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The year is off to an interesting start with a number of positive stories impacting the construction industry. The National Football League announced that Los Angeles will once again be the home of the Rams in a new 3.1 million square foot sports complex. In addition to the 6,000 seat stadium the project will include a hotel, homes, retail and office space and 25 acres of parks. The cost of construction has been reported from various sources to range from 1.6 to 3 billion dollars. When completed in 2017 the sports complex will be the most expensive venue in the world. Just south of L.A. the city of San Diego began planning a 260 million dollar convention center. On the opposite coast Atlanta is coming off of a record 2.9 billion dollar year of construction starts and has plans for a 140 million dollar office complex and 160 million dollar USDA lab in nearby Athens, GA.
The record low price of oil is slowing construction in the oil and gas sector, impacting Alaska, Wyoming, and North Dakota with double digit construction unemployment rates. Despite the slowdown is this sector, overall unemployment was at its lowest level in February at 4.9%. Texas, a State associated with oil, had the lowest construction unemployment is 2014 and remains the fifth lowest at 5.2%. Houston has 102 apartment complexes under construction and Corpus Christi is planning a 150 million dollar hospital expansion project.
Chicago is experiencing a boom in the high rise rental market with 34 buildings over 200 feet currently under construction. Closer to street level developers are investing 50 million dollars into the revitalization of the Fulton Market District. They hope to turn this meat packing and warehouse area into a vibrant retail center. The City is also seeking investors to develop the 65 acre Cabrini- Green area. They hope to turn the vacant lots into a low to moderate income housing area with retail outlets.
Last Year the New York City Metropolitan area led the country with 34.9 billion dollars of commercial and multifamily construction projects. The pace continues into this year as the top 10 construction projects alone will add a total of 1.5 million square feet of mixed use space. New York began construction of the 6 billion dollar Tappan Zee Bridge replacement in 2012, construction will continue until 2018. Governor Andrew Cuomo recently propose a 100 billion dollar budget for infrastructure improvements.
The increase in construction activity throughout the country combined with the low unemployment rate is creating a shortage of construction workers and driving wages up. The year is off to a promising start for the construction industry.