While the overall electrical market certainly has a sluggish feel to it this year, you wouldn’t know it from the data measuring construction employment growth, building permits and population growth in some cities and states. Most of the U.S. population growth is currently happening in 10 states — Texas, California, Florida, North Carolina, Georgia, New York, Washington, Arizona, Colorado and Virginia — and a small handful of cities including Boston, Las Vegas and Nashville, Tenn.
Population growth is a key driver in the hottest construction markets, as many of the Metropolitan Statistical Areas (MSAs) attracting the most new residents are also logging thousands of building permits for single-family and multi-family homes and are enjoying a double-digit surge over the past year in construction employment. Texas is the best example. Despite the slowdown in its energy markets, the state still added 1.7 million new residents from 2010-2014, according to population estimates from the U.S. Bureau of the Census. The Dallas and Houston MSAs each added more than 500,000 new residents according to the most current government data (see chart on page 2). Austin added 226,996 newcomers and San Antonio welcomed 186,000 new residents, while the Midland-Odessa oil patch’s population grew more than 11% from 2010-2014, adding 36,387 residents.
All of these new residents need someplace to live, and the Dallas and Houston MSAs topped the nation in single-family building permits through July with 40,132, while Austin logged over 7,000 single-family permits. The story is pretty much the same in the multi-family building permit arena, as Dallas and Houston are ranked #3 and #4, with a combined total of 26,000 permits. The amazing thing with this construction data is that all of this building doesn’t come close to the multi-family permit activity in the Big Apple and its surrounding MSA in northern New Jersey, Long Island, and some outlying areas. Highlighted by 1,000-foot tall condo towers in Manhattan, builders in this area have pulled over 55,000 permits through July. Los Angeles (15,517 multi-family permits), Seattle (9,938 permits) and Miami (9,291 permits) are also on the multi-family market’s leader board, in the #2, #5 and #6 positions, respectively, and are followed in the Top 10 by the Atlanta MSA (6,278 permits), Washington, D.C. (5,908 permits) and Boston (5,724 permits).
While it’s easy to be wowed by the amount of population growth and construction activity in some of the nation’s largest cities and metropolitan areas, don’t overlook the growth potential of some select smaller MSAs. In Florida, the Cape Coral-Fort Myers MSA and The Villages MSA are enjoying solid population growth that’s feeding demand for electrical products in construction markets. The population of the Cape Coral-Ft. Myers area on Florida’s Gulf Coast increased by 60,000 over the past few years and The Villages retirement community northwest of Orlando has recently been ranked as the nation’s fastest-growing MSA. An estimated 18% of its 114,000 residents moved there just in the last five years.
