Trends in Construction

 According to the most recent report from the Texas Comptroller's office between August 2012 and August 2013 Texas added 274,700 jobs and has now remained at or below the national average unemployment rate for 80 consecutive months. This is a strong indication of the economic recovery being driven by a boom in oil & gas within the state.

Although single-family residential construction remains depressed, the total value of the contracts for the most recent year available for nonresidential building construction of offices, fabrication facilities, and warehouses increased 10.6% over the previous year.

In 2011 there was a 4.8% jump in construction jobs with most of the new jobs being added in heavy and civil construction, as well as utility construction work by specialty trade contractors. The trend clearly shows strong growth potential in apartment, hotel, warehouse and oil/gas related construction while there has been a steady decline in highway, street & bridge construction and building finishing contractors.

Oil and gas clusters are still major drivers of construction in Texas and this trend is likely to gather momentum as production increases. In November the U.S. reached a major energy production milestone - it produced 137,000 more barrels a day than it imported. This is the first time in nearly 20 years the U.S. is producing more crude oil than it imports.

Oil and gas production will continue to drive the Texas economy and in-turn the construction industry. However, there will be regional exceptions to this like Central Texas which will see strong growth in highway, street and bridge construction as well as building finishing contracts. You can see this illustrated below in the Texas Workforce Commission's construction employment projections through 2020:

Being aware of the local construction growth trend in your market will allow your agency to focus resources on developing business relationships with the contractors who have market dynamics working in their favor.

Feel welcome to contact sgoodman@insurors.com for a one-page analyst brief detailing the local construction trends in your market which IIC will be happy to email you.