Sunday, May 13, 2012

Arizona shows big jump in 2011 construction

Arizona ranked fifth among U.S. states for construction spending on commercial real-estate projects in 2011, a huge advance from its No. 14 position the previous year, according to a report issued this week.

The report, from the Virginia-based real-estate development association NAIOP, said companies spent $4.2 billion on Arizona commercial-development projects in 2011, supporting more than 74,000 jobs.

The huge jump in Arizona construction spending was due in large part to the ongoing construction of Intel Corp.'s $5 billion Fab 42 project in Chandler, which began in summer 2011 and is expected to be completed in 2013.

The facility, touted as the largest microchip-fabrication facility in the world, is expected to employ about 1,000 full-time workers upon completion.

The biggest spender in the U.S. on commercial construction in 2011 was Texas, with $7.9 billion spent on commercial projects supporting about 150,000 jobs, the NAIOP report said.

New York was second, with $6.5 billion in construction spending and about 83,750 jobs supported, it said.

In third place was West Virginia, with $5.9 billion in construction spending and about 101,000 jobs supported, followed by California, with $4.5 billion in spending and about 71,000 jobs supported.

Nationally, development and construction of commercial real estate -- including office, industrial and retail buildings -- rebounded in 2011, the NAIOP report said.

It was the first year to post gains in construction spending since the recession began in 2007, according to the report, titled "How Office, Industrial and Retail Development and Construction Contributed to the U.S. Economy in 2011."

Construction spending on commercial real estate totaled $92.3 billion in 2011, an increase of more than 12 percent compared with 2010, the report said.

That spending supported nearly 2 million jobs nationally, it said.

Although most developers have yet to resume construction of new multitenant office and retail projects, there has been a resurgence of multifamily housing and warehouse construction, both of which are considered commercial development.

The total economic impact of commercial real-estate development, including pre-construction, construction and post-construction, added $261.6 billion to the U.S. gross domestic product in 2011.

That's a 13 percent increase over the $231.7 billion commercial construction added to the U.S. GDP in 2010, according to the report, which was issued Monday.

The increase in construction spending and activity resulted in the building of 238.3 million square feet of new commercial space, an increase of 2.5 percent from 2010.

That new space has the capacity to house 610,000 jobs with an annual payroll of $26.8 billion, the report said.

"2011 was a transition year for the U.S. economy and the construction sector," said report author and economist Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. "The U.S. economy shifted from a federal stimulus to private-sector-driven growth pattern, and construction spending grew accordingly."

Forecasts for 2012 call for construction spending to increase and accelerate further in 2013 and 2014, according to the report.

"For the first time, we are seeing across-the-board increases in this sector," said Thomas Bisacquino, NAIOP president and CEO. "We believe this is the most solid evidence yet of a strengthening recovery."

by J. Craig Anderson - May. 8, 2012 06:18 PM The Republic |

Arizona shows big jump in 2011 construction

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