Florida’s Construction Boom and Current Trends
Florida was recently named “the best state for construction.” For the fourth time, Florida claimed the top spot in Associated Builders and Contractors’ eighth annual Merit Shop Scorecard, a ranking of all 50 states and the District of Columbia.
The commercial real estate market continues to rebound after a pandemic-induced decline. While this industry, and the subsequently affected commercial construction industry, has fluctuated since 2020, it’s now on an upward trend as investment and construction activity increases.
Here are some 2023 commercial real estate projections for South Florida:
- Office construction is projected to increase 30%.
- Retail and hotel construction are also expected to increase, although at a slower pace.
- Investment activity is expected to increase in all sectors, as investors seek to capitalize.
- Sales volume is projected to reach $10 billion in 2023, up from $8 billion in 2020.
With this much property being sold, commercial construction is also booming. Are you ready to expand your company’s brand? Open a new location? Launch a sister company at a different site?
National Infrastructure Spending Affects Construction
Federal spending on infrastructure development is expected to support growth in the construction market.
In November 2021, Congress passed a $1 trillion infrastructure spending bill. As the government upgrades roads and highways over the next 8 years, modernizing city transit systems and passenger rail networks, the need for commercial construction—whether new builds or renovation—also increases.
Across the nation, “The size of the construction market amounted to 6.4 trillion U.S. dollars in 2020, and it is expected to reach 14.4 trillion in 2030.” Industry experts believe that federal infrastructure spending will keep supporting the growth of the construction industry over the next four to eight quarters.
What About Construction Growth in Florida?
In early 2023, Florida Governor Ron DeSantis announced the Moving Florida Forward initiative to expedite transportation projects over the next four years. Through this record financial investment, work is being done “to combat congestion, improve safety, and ensure a more resilient transportation system to bolster current transportation needs and set the stage for future growth.”
In June 2023, Governor DeSantis signed his Florida Framework for Freedom Budget for the fiscal year 2023–2024, earmarking $14.8 billion to fund essential projects that improve and increase the state’s transportation network and facilitate trade.
This massive investment for infrastructure will literally pave the way for commercial development, and Florida will continue to see a construction boom as a result.
Positive and Negative Trends for Construction in 2023
Your company can leverage the shifting market and harness the following emerging trends to gain an advantage over competitors.
- More Efficient Construction Technology: Digital tech tools like drones, augmented reality (AR), and building information modeling (BIM) enable companies to offer clients tangible imaging before breaking ground, streamline the construction process, and improve build accuracy. Collaborative project management software also streamlines the process from start to finish.
- Sustainable “Green” Construction: Business owners are looking for ways to reduce their company’s carbon footprint in order to protect the planet and ease shareholder and customer concerns around climate change. Eco-friendly materials, renewable energy, and green scapes are all options that can also save money in the long run.
- Increasing Material Costs: It’s important to save money wherever possible because there is no sign that materials cost will go down in 2024. Data from the U.S. Bureau of Labor Statistics show that the producer price index for final demand construction was up 4% in May of 2023 compared to a year ago. This is just a single data point in a longer-term trend of rising construction costs.
- Modular and Offsite Construction: One way to save money is to choose from stock and custom Modular Buildings for temporary and permanent applications. When time is of the essence, versatility in designs provide maximum flexibility and fast solutions. Whether it’s a new office campus, relocation of your business, or expansion of facilities for your team—prefabricated construction can deliver safe, code-compliant, and cost-effective buildings.
- Increasing Pressure on the Bottom Line: Even with an increase in construction revenue, construction companies—and the companies who hire them—want to see a net profit. There are several ways to boost your bottom line, including negotiating with vendors. A big way for businesses to prioritize efficiency and cost-savings is to skip hiring a construction company and instead utilize a construction management company that does it all, ensuring your projects stay on schedule and within budget.
Construction Growth Despite Increased Materials Cost
Anne Hunt, director of data and analytics at Trimble’s Viewpoint, predicts continued growth in the nonresidential category in 2023. Hunt explains, “There’s an increasing number of construction workers in Texas, Florida, and the Midwest. As more people flock to warmer states and friendlier tax environments, those construction trends will follow.”
Data also reveals that plumbing, wood-based building materials, roofing, and architectural interiors are all projected to maintain stable prices with diminishing lead times over the next 6–12 months. However, HVAC and electrical are expected to rise 15% over the next year, with lead times predicted to increase from already significant current numbers.
Here’s the best news yet: Materials cost and delays don’t need to be a deterrent to starting your next project. At Hurd, commercial construction is made easy with our buildout and renovation expertise for brand-centric retail, restaurant, and office environments. What’s more—we have more than 1,100 statewide vendor partners, immediate resources to scale for multi-site initiatives, and proven Florida best practices increasing speed to market.
Hurd can help ensure that lead times are accounted for within the design, permitting, and construction process in order to eliminate any delays or down time. This will yield quicker ROI’s for the client.
Complete Construction Planning and Project Management
Hurd Construction Management is adept at strengthening brands across Florida with our strategic construction expertise. We’re busy during the boom, but we always have time for you.
If you need an experienced and reliable company to be your owner’s representative and project manager throughout the entire pre-planning to post-construction process for a commercial build or renovation, contact us today.