The Houston area added the most construction jobs in the nation during the past year, according to a new report by the Associated General Contractors of America, gaining 19,300 jobs through June, 2018.

Construction employment rose in 76 percent of the 358 metro areas tracked by the organization.

Midland added 6,700 jobs, a 24-percent rise for the year, and was among 64 metro areas that set new construction employment highs. Only Merced, Calif. posted a higher percentage gain, adding 700 jobs or 28 percent.

Houston’s 9-percent gain in construction jobs matched the Dallas region, which added 12,200 jobs. Phoenix posted an 11-percent gain, adding 13,100 jobs.

“Increases in construction employment in the past year were widespread and strong, as employment increased in three-fourths of metro areas,” chief economist Ken Simonson said in an announcement.

“Workers in most metro areas are benefiting as firms keep pace with strong demand for construction services.”

Cities with the largest year-over-year job losses through June were Middlesex, N.J. (-3,400 jobs or -8 percent), followed by Newark, N.J. (-2,800 jobs or -6 percent); and Nashville, Tenn. (-2,300 jobs or -5 percent).

Metro areas with the most jobs added from June 2017 to June 2018:

Houston: 19,300 jobs, 9 percent
Phoenix, Ariz.: 13,100 jobs, 11 percent
Dallas: 12,200 jobs, 9 percent
Atlanta, Ga.: 8,400 jobs, 7 percent
New York City: 8,300 jobs, 5 percent

Source:  The Houston Chronicle’s Houston tops nation for construction job growth

The Greater-Houston area experienced a growth in volume of commercial construction projects during the first half of 2017.  When held in comparison to the same period in 2016, commercial jobs increased 11 percent, while residential construction dropped four percent, according to Dodge Data and Analytics.

The rise in commercial development favorably indicates Houston’s economy is gaining momentum.  Nonresidential construction in June 2017 was 38 percent higher than that of the previous year. In contrast, residential sales and home prices have reached record heights; and June 2017 numbers were 27 percent lower than those in 2016.

The end of the year will likely show similar demands for commercial development, if not an even greater surge in nonresidential contracting services.  The United States is on track to deliver almost 48 million square feet of new space over the remaining three months.  In a list compiled by a Yardi Matrix poll, Houston is among the top-ranking cities, nationally, at 17.

See The Houston Chronicle’s Commercial construction in Houston jumps as residential work slows by Dylan Baddour and CommercialCafe’s Top US Cities for Office Deliveries During Fall-Winter 2017 for more information on these topics.

Following an August we will not soon forget, Hurricane Harvey made landfall in Houston at the end of the month causing an estimated $198 billion in property damage. Hurricanes Irma, Maria and Nate followed shortly after, leaving Florida, Puerto Rico and Mississippi reeling with exorbitant rebuilding expenses.

Prior to the devastation that pummeled the Gulf Coast, commercial contractors reported in a third-quarter Commercial Construction Index survey that they anticipated revenue and profit margins to grow or remain stable over the next year.  In fact, the 2017 Turner Building Cost Index registered a nearly five-percent hike in yearly comparisons of second quarters.

The aftermath of the storm saw the demand for construction materials rise.  In the Houston area alone, Thomas Index Report, a firm linking buyers and sellers, recorded a 400-percent increase of drywall inquiries; 150-percent rise in plywood and 2,000-percent boost for hardwood flooring and concrete.

Vice President of Marketing at ThomsNet Shawn Fitzgerald believes the supply trend is not surprising considering the extent of the combined disasters.  “With so much damage to businesses and infrastructure, sourcing trends in and around Houston have changed drastically in the weeks following its landfall as the areas look to rebuild and recover.”

In order to meet growing construction demands, contractors in many states are expanding employment numbers.  Texas added 15,200 construction jobs over the last 12 months, up 2.2 percent when measured against figures from the prior year.  While a sudden increase to the construction workforce in Texas may assist in some aspects of the recovery, Jeff Myers, a managing consultant for CoStar Portfolio Strategy, believes the flow will not be significant enough to guarantee project timelines or preserve low cost.

The surge in demand from multiple U.S. locations will further intensify the burden on material delivery times, as well as pricing in many other areas throughout the country.

For more on this topic, check out CoStar Group’s Storm Fallout: Rebuilding Likely to Drive Up Construction Costs, Delay Project Timetables Across US.

The American City Business Journals recently reported that Texas is home to two of the most rapidly expanding cities in the United States: Houston and Dallas-Fort Worth.  People are flocking to the Lonestar State, recording one thousand new residents, per city every week.

The Great Recession, a term coined in reference to the significant reduction in economic activity in the late 2000s to early 2010s, saw much of North America suffering ongoing hardship.  While construction companies in most regions of the country were greatly affected, Texas managed to avoid much of the strain caused by the downturn.

In fact, businesses from other parts of the U.S. migrated to the Texas’ more successful cities to take advantage of economic stability.  A thriving economy in the midst of depression is comforting to the existing community.  David Stueckler, president and CEO of Linbeck, acknowledges the good with the bad:

Texas didn’t suffer the big dip that everybody else suffered, so it’s been highly competitive. That tends to drive down fees and limit your opportunities. …The oil and gas industry [is] where a lot of the domestic product in Texas comes from. I’m not really concerned about another Great Recession…in our world, when you look at those markets specifically, we’re confident someday that the rig counts will go back up. That’s sort of the normal oil and gas cycle. Things like that will affect us, hopefully positively, in the future in big ways.

While business often feels like it is booming in a state sequestered from the growing pains felt by the world at large, many cultural residuals will influence the way in which commercial construction companies typically operate.

This article is based on information found in Construction Dive’s 50 States of Construction series.

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