Dodge Data Analytics South Region Mid Year Outlook 052621 Lo 002

MID-YEAR OUTLOOK
RICHARD BRANCH
CHIEF ECONOMIST, DODGE DATA & ANALYTICS
SARAH MARTIN
SENIOR ECONOMIST, DODGE DATA & ANALYTICS
EVENT SPONSORED BY:
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MID-YEAR OUTLOOK
RICHARD BRANCH
CHIEF ECONOMIST, DODGE DATA & ANALYTICS
SARAH MARTIN
SENIOR ECONOMIST, DODGE DATA & ANALYTICS
EVENT SPONSORED BY:
Today’s Agenda
• National Overview
• South Region Forecast
• Final Points/Questions
Hampton Roads Bridge

Tunnel Expansion
Hampton, VA
$3.6 billion
Project Start: October 2020
Today’s Agenda
South Region States
Alabama Mississippi
Arkansas North Carolina
Delaware Oklahoma
District of Columbia South Carolina
Florida Tennessee
Georgia Texas
Kentucky Virginia
Louisiana West Virginia
Maryland

U.S. Macroeconomic Overview
Economy is operating 11% below pre-pandemic level
Source: Moody’s Analytics

Economic growth to accelerate during 2021 2020 -3.5%
2021F +5.8%
2022F +5.2%
Source: Bureau of Economic Analysis/Dodge Data & Analytics

Construction material inflation accelerating…
Source: U.S Bureau of Labor Statistics

U.S. Construction Market Indicators
The Dodge Momentum Index offers insight on what’s ahead
• Tracks initial report for nonres projs in planning

• Leads Census construction spending by 12 mos
Apr-21 Mar-21 % Change
Dodge Mome ntum Inde x 162.4 149.5 8.6%
Comme rcia l Building 172.2 172.6 -0.2%

Ins titutiona l Building 150.3 120.9 24.3%
Source: Dodge Data & Analytics

U.S. Construction Market Indicators
Projects in bidding suggest market resilience

U.S. Construction Starts
Uneven start to 2021 for construction starts

U.S. Residential Building Outlook
Veyoel Moshe Gardens

Development
Kiryas Joel, NY
$400 million/1.8 msf/700 units
Project Start: December 2020

U.S. Residential Building Starts
Residential units to rise 4% in 2021 and 6% in 2022

Sales post stunning comeback, but settling back as rates increase
Source: National Association of Realtors/U.S. Federal Reserve

Vacancy rates were moving higher before COVID-19
2021Q1 = 4.7%
2009 Cyclical High = 7.2%
Source: CB Richard Ellis Econometric Advisors

Housing construction shifting to smaller areas

U.S. Commercial Building Starts
Richards Boulevard Office Complex

Sacramento CA
$855 million/474 tsf
Project Start: November 2020

U.S. Commercial Building Starts
Commercial construction to ease into recovery in 2021

U.S. Retail Building Starts
Retail sector to benefit from shifting residential sector

U.S. Warehouse Building Starts
Warehouse construction expected to break records

U.S. Warehouse Building Starts
Amazon largest builder over last three years

U.S. Hotel Building Starts
Hotel has path to recovery over longer term

U.S. Hotel Building Starts
Hotel classes area by stage of activity (excluding independent hotels)

U.S. Office Building Starts
Outlook for office construction mixed

U.S. Office Building Starts
Data centers becoming a larger share of office construction
2021 Data through Mar

U.S. Manufacturing Building Starts
Manufacturing starts growth will be tepid through 2022

U.S. Institutional Building Starts
OSU Wexner Inpatient Hospital Tower

Columbus OH
$1.2 billion/1.9 msf
Project Start: February 2021

Institutional building starts slow to recover

U.S. Education Building Starts
Weakness in budgets a drag on education sector

U.S. Education Building Starts
Enrollment growth ultimately drives activity for many segments
ØK-8 enrollments plateauing ØCollege enrollments inching higher
Source: National Center for Education Statistics

U.S. Healthcare Building Starts
Healthcare starts poised for growth

Institutional building starts slow to recover

U.S. Nonbuilding Starts
Traverse Wind Energy Center

Oklahoma
$1.2 billion
Project Start: December 2020

Public works activity to see injection of funds in 2022

Middle-of-the-road infrastructure plan
• $100 billion for roads, bridges, and road safety

• $100 billion for affordable housing
• $55 billion for public transit
• $55 billion public schools and community colleges
• $55 billion for water and sewers
• $50 billion for Amtrak and rail
• $50 billion for electric grid enhancements
• $40 billion for broadband
• $15 billion for ports and waterways
• $15 billion for airports
• $15 billion for veteran's healthcare and federal buildings
Total: $550 billion Spending 2022-2025
Plus: $300 billion for highway portion of new 5-year FAST Act replacement (included in previous forecasts)

U.S. Highway and Bridge Starts
Highway and bridges make steady gains

U.S. Environmental Public Works Starts
Starts will rise 8% in 2021, further will increase 4% in 2022

U.S. Nonbuilding Building Starts
Infrastructure bill impact begins in 2023

U.S. Total Construction Outlook
ApiJect Systems Gigafactory

Durham NC
$785 million/1,000 tsf
Project Start: February 2021

U.S. Total Construction Starts
Total construction to rise 5% in 2021 and 8% in 2022

South Region Construction Outlook
Hampton Roads Bridge Tunnel Expansion

Hampton, VA
$3.6 billion
Project Start: October 2020

South Macroeconomic Overview
South region is 9% below pre-pandemic level
Source: Moody’s Analytics

South Construction Market Indicators
Construction starts buoyant since pandemic began

Largest Construction Starts – Oct 2020 through Mar 2021

Number of projects in bidding improve over last year

South Region Economic Outlook
Mostly uniform economic growth expected throughout South
Source: Bureau of Economic Analysis/Dodge Data & Analytics

South Region Total Construction Starts
Not all states saw pullback in 2020

South Region Residential Starts
Strong demographic trends support residential growth

South Region Residential Starts
But residential growth strongest outside of major metros

South Region Nonresidential Building Starts
Nonresidential recovery solidifies by 2022

South Region Nonbuilding Starts
Infrastructure program to help nonbuilding starts in 2022

Connect with Me
Follow me for more construction news
RichBranch1 RichardBranch1
Richard Branch
Chief Economist www.construction.com/toolkit
Dodge Data & Analytics www.construction.com/newsletter-subscriptions
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MID-YEAR OUTLOOK

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Hampton Roads Bridge

South Region States

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Source: Moody’s Analytics

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Source: Bureau of Economic Analysis/Dodge Data & Analytics

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Source: U.S Bureau of Labor Statistics

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• Tracks initial report for nonres projs in planning

Dodge Mome ntum Inde x 162.4 149.5 8.6%

Comme rcia l Building 172.2 172.6 -0.2%

Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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Veyoel Moshe Gardens

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Source: Dodge Data & Analytics

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Source: National Association of Realtors/U.S. Federal Reserve

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Source: Dodge Data & Analytics

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Richards Boulevard Office Complex

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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2021 Data through Mar

Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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OSU Wexner Inpatient Hospital Tower

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics

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ØK-8 enrollments plateauing ØCollege enrollments inching higher

Source: National Center for Education Statistics

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Source: Dodge Data & Analytics

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Source: Dodge Data & Analytics