Quarterly Construction Report

The Carter Machinery Quarterly Construction Report focuses on construction industry data for the Southeast United States

Carter Machinery Quarterly Construction Report

New Residential Construction Outlook 2014

First Quarter 2014

Summary

New residential construction, one of the leading economic predictors of the U.S. economy and real estate market, grew over 16% in the first quarter of 2014 compared to the first quarter 2013, and is on track to seeing continued growth into the second quarter. Analysts at Carter Research, a division of Carter Machinery, investigated the fastest-growing construction markets in the Southeast states based on new construction permits issued and expenditure per capita. The results of the analysis can be viewed below.

Data Highlights:

  • Miami-Dade County, FL is the #1 largest and fastest-growing construction market in the Southeast, with a 218% increase in new housing permits authorized year over year.
  • Florida is the single state with the largest construction growth in Q1 2014, with over $2.2 billion spent in construction for the Top 5 counties alone.
  • Nashville, TN (Davidson County) was the only region to achieve near- Top-10 rankings across overall factors: Total Permit Value (#9), Rate of Growth (#3), and Per Capita Expenditure (#11)
  • Wake County, NC, home to Raleigh & Cary, led the rankings with the highest number of single-family housing buildings authorized in Q1 2014, and was recently ranked the #2 Fastest Growing City in 2014 by Forbes.
  • The Atlanta, GA metro area remains the single most concentrated region of construction in the Southeast, with more than 4,500 new construction units authorized within a 30 mile radius.

Current Status of US Economy & Real Estate Market

In the fourth quarter of 2013, the U.S. economy accelerated at a rate of 2.6% as measured by an increase in the Gross Domestic Product (GDP) over the fourth quarter 2012 [U.S. Census Bureau]. Government spending fell, as it did in the fourth quarter of 2012, but the economy slowly recovered as consumer spending increased by 1.5% last year over 2012.

In the first quarter, the economy slowed with a 1% decrease in GDP, the first negative figure in 3 years. Despite this slight downturn, many economists believe the economy will recover in the second half of 2014, as fixed investments (e.g. new residential construction) continue to increase.

In the Southern* region of the United States in particular, new private residential construction increased 6.6% in Q2 over Q1, as measured by the total number of units authorized.

Methodology

Carter Machinery researched available construction building permit data on new privately-owned residential housing (single and multi-family residences), with the objective of discovering which southeastern states of the U.S. have grown and decreased their building needs from January through March 2014.

Data was collected from the United States Census Bureau at the end of March 2014. All information for counties in the states of Virginia, West Virginia, Alabama, Kentucky, Mississippi, Tennessee, South Carolina, North Carolina, Georgia and Florida was gathered up through the data made available by the government.

Researchers then used the information to sort the data based on buildings and unit permits issued, as well as the overall value of all permits issued. Counties were then ultimately ranked based solely on value of permits issued for the first quarter of 2014 for this report.

Results of the Data

For each state, counties are ranked based on the data available for the total value in US Dollars (seasonally adjusted rate) of the permits issued for January through March 2014.

Alabama

Alabama top construction counties In Alabama, the top five gross performers for the second quarter of 2013 were:

  1. Jefferson County - $101,876,931
  2. Madison County - $86,013,394
  3. Lee County - $58,372,935
  4. Baldwin County - $44,497,853
  5. Tuscaloosa County - $36,906,284

Jefferson County is the most populous county in Alabama and it holds the county seat, which is located in Birmingham. The county was named after Thomas Jefferson, the third president of the United States, and it hosts such highlights as the Alabama Jazz Hall of Fame, the Birmingham Zoo, and events such as the Southern Heritage Festival.

Florida

Florida top construction counties In Florida, the top five gross performers for the first quarter of 2014 were:

  1. Miami-Dade County - $772,790,360
  2. Hillsborough County - $518,885,272
  3. Orange County - $407,652,937
  4. Palm Beach County - $270,356,882
  5. Sumter County - $220,516,751

Miami-Dade County, currently the 7th most populous county in the U.S, is home to Miami and its numerous suburbs. The abundance of new construction projects, primarily condominium buildings and other multi-family housing, is due to a variety of factors, from the increasing cost of rent and a healthier, stabilizing economy.  The average cost/unit in Q1 2014 was nearly $400,000, currently making it one of the highest-valued housing areas in the country. Miami is the fastest growing county in new housing expenditure, almost twice the size of growth of the second-fastest area, Lake County (See Table 2).

Of note: Osceola County (not shown above), whose county seat is Kissimmee, had the highest per-capita expenditure of new housing among all counties in Q1 2014. (See Table 3)

Georgia

Georgia top construction counties In Georgia, the top five gross performers for the first quarter of 2014 were:

  1. Fulton County - $272,670,389
  2. Cobb County - $119,778,029
  3. Gwinnett County - $107,661,446
  4. Cherokee County - $78,379,743
  5. Forsyth County - $77,380,372

Fulton County is where Atlanta, the state capital, has been located since 1868. Ninety per cent of Atlanta lies within Fulton County while the other 10% lies in DeKalb County, not featured on the top five gross performers list.

Fulton is the most populous county in the state of Georgia and it is home to the World of Coca-Cola, the Georgia Aquarium, Zoo Atlanta and the centennial Olympic Park. All of the top five gross performers in Georgia are very closely located to Fulton County.

Kentucky

Kentucky top construction counties In Kentucky, the top five gross performers for the first quarter of 2014 were:

  1. Jefferson County - $37,126,721
  2. Warren County - $22,363,833
  3. Boone County - $12,316,323
  4. Kenton County - $11,292,596
  5. Marshall County - $9,263,400

Jefferson County is the most popular county in Kentucky and it is home to Louisville, the largest city in the state. Attractions include the Kentucky Derby, the Louisville Slugger Museum and the Speed Art Museum.

In the first decade of 2000, Louisville experienced one of the fastest population growth rates at 120%. This has led to Jefferson’s strong construction numbers and high value permits.

Mississippi

Mississippi top construction counties In Mississippi, the top five gross performers for the first quarter of 2014 were:

  1. Madison County - $30,186,030
  2. DeSoto County - $28,822,452
  3. Rankin County - $22,329,080
  4. Harrison County - $21,657,247
  5. Lafayette County - $17,633,040

Madison County is the fastest growing county in Mississippi by population and achieved the #1 ranking in new construction permits this quarter.

North Carolina

North Carolina top construction counties In North Carolina, the top five gross performers for the first quarter of 2014 were:

  1. Wake County - $377,744,160
  2. Mecklenburg County - $261,559,309
  3. Guilford County - $77,938,511
  4. Brunswick County - $65,057,693
  5. Iredell County - $62,234,102

Wake County is home to Raleigh, NC, and constitutes part of the Research Triangle area, which includes Raleigh, Durham, Cary, Chapel Hill, and outlying suburbs. Along with the banking industry in Charlotte (Mecklenburg County), the Research Triangle bolsters North Carolina’s economy through technological research and development, providing many job opportunities for the state. Wake County was recently ranked the “#2 Fastest Growing City in 2014” by Forbes.

South Carolina

South Carolina top construction countiesIn South Carolina, the top five gross performers for the first quarter of 2014 were:

  1. Greenville County - $137,127,385
  2. Horry County - $129,101,136
  3. Berkeley County - $94,612,177
  4. Charleston County - $83,093,366
  5. Beaufort County - $80,831,116

Tennessee

Tennessee top construction countiesIn Tennessee, the top five gross performers for the first quarter of 2014 were:

  1. Davidson County - $212,512,496
  2. Williamson County - $121,051,392
  3. Rutherford County - $111,751,708
  4. Shelby County - $77,011,097
  5. Knox County - $52,824,268

Davidson County holds the county seat city of Nashville, and is part of the Nashville-Davidson-Murfreesboro-Franklin Metropolitan Statistical Area. Nashville, nicknamed the “Music City,” is known for its many music festivals, which draw thousands of country music fans from the southern and northern states alike.

Virginia

Virginia top construction countiesIn Virginia, the top five gross performers for the first quarter of 2014 were:

  1. Loudoun County - $191,362,038
  2. Fairfax County - $120,387,923
  3. Stafford County - $47,561,035
  4. Chesapeake County - $42,457,570
  5. Chesterfield County - $39,414,176

Loudoun County is a part of the Washington Metropolitan area and it is home to the Washington Dulles International Airport. 

As of 2011, it has the highest median household income for all counties in the United States. Fairfax County and Arlington County are second and third, respectively, so there will always be more advanced construction projects for residential communities taking place in these areas of Virginia.

West Virginia

West Virginia top construction countiesIn West Virginia, the top five gross performers for the first quarter of 2014 were:

  1. Berkeley County - $21,779,593
  2. Jefferson County - $10,178,154
  3. Putnam County - $4,308,772
  4. Greenbrier County - $3,805,089
  5. Monongalia County - $2,663,201

Berkeley County is located in the eastern part of the state, adjacent to the Washington DC area. Two major interstate highways run through Berkeley County—I-81 (north/south) and I-70 (east/west), providing good infrastructure for commerce between Maryland, Virginia, and Pennsylvania.

Berkeley County boasts a relatively low cost of living index of 86.3 (100 = national average) as of March 2013.

Entire Southeast

For the entirety of the Southeast (herein defined as consisting of the following states: Alabama, Florida, Tennessee, Kentucky, Georgia, Virginia, West Virginia, Mississippi, South Carolina and North Carolina), the top ten gross performers for the first quarter of 2014 were:

Table 1. Top 10 Counties Ranked by Total Permit Cost in Q1 2014

Rank County State Total Permit Cost
1 Miami-Dade County FL $772,790,360
2 Hillsborough County FL $518,885,272
3 Orange County FL $407,652,937
4 Wake County NC $377,744,160
5 Fulton County GA $272,670,389
6 Palm Beach County FL $270,356,882
7 Mecklenburg County NC $261,559,309
8 Sumter County FL $220,516,751
9 Davidson County TN $212,512,496
10 Loudoun County VA $191,362,038

Table 2. Top 10 Fastest Growing Counties by Expenditure, Q1 2014 vs. Q1 2013

Rank County State Q1 2013 Total Permit Cost Q1 2014 Total Permit Cost % Increase
1 Miami-Dade County FL $243,344,545 $772,790,360 218%
2 Lake County FL $61,822,462 $130,030,064 110%
3 Davidson County TN $102,821,949 $212,512,496 107%
4 Lee County FL $135,579,166 $210,355,918 55%
5 Pasco County FL $77,146,167 $110,629,917 43%
6 Fulton County GA $193,326,616 $272,670,389 41%
7 Polk County FL $78,101,006 $110,000,680 41%
8 Sarasota County FL $115,061,303 $161,553,939 40%
9 Duval County FL $106,341,390 $147,433,186 39%
10 Osceola County FL $125,371,828 $162,798,574 30%

Table 3. Top 10 Counties Per Capita Expenditure, Q1 20141

Rank County State Q1 2014 Permit Cost Population
(2013 Est.)
Expenditure Per Capita
1 Osceola County FL $162,798,574 288,046 $565.18
2 Loudoun County VA $191,362,038 349,679 $547.25
3 Lake County FL $130,030,064 302,247 $430.21
4 Sarasota County FL $161,553,939 385,286 $419.31
5 Hillsborough County FL $518,885,272 1,275,617 $406.77
6 Rutherford County TN $111,751,708 281,029 $397.65
7 Wake County NC $377,744,160 974,289 $387.71
8 Manatee County FL $129,330,061 333,698 $387.57
9 Orange County FL $407,652,937 1,199,627 $339.82
10 Lee County FL $210,355,918 643,107 $327.09

Overall, Florida was the single state that spent the most on building permits for the first quarter of 2014.

Davidson County, TN performed the best, nearly appearing in the Top 10 across all metrics: #9 by Total Permit Value, #3 in Growth, and #11 Per Capita Expenditure.

*The US. Census Bureau defines the Southern states as: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. [http://www.census.gov/construction/nrc/definitions/]

Contact Information

Should you have any questions regarding the methodology or content within, please contact ryan@carterresearch.org.

Carter Machinery is not responsible for errors/omissions in the data provided by the U.S. Census Bureau or any other third party.

1Includes counties with populations greater than 250,000 only (U.S. Census 2013 Estimates)