Construction Growth Outlook for Brevard County

Posted at 1:51 pm on 03/24/2015 by Carrie Bierman
​Construction Industry Overview

According to
Dodge Data & Analytics 2015 Forecast, total US construction starts for 2015 will rise 9% to
$612 billion, a larger gain than the 5% increase to $564 billion estimated for 2014.
The construction expansion should become more broad-based in 2015, with support coming from
more sectors than was often the case in recent years. The economic environment going forward
carries several positives that will help to further lift total construction starts. Financing for
construction projects is becoming more available, reflecting some easing of bank lending
standards, a greater focus on real estate development by the investment community, and more
construction bond measures getting passed. While federal funding for construction programs is
still constrained, states are now picking up some of the slack. Interest rates for the near term
should stay low, and market fundamentals (occupancies and rents) for commercial building and
multifamily housing continue to strengthen.
Based on research of specific construction market sectors, the 2015 Dodge Construction Outlook
details the forecast as follows:
• Commercial building will increase 15%, slightly faster than the 14% gain estimated for
2014. Office construction has assumed a leading role in the commercial building upturn,
aided by expanding private development as well as healthy construction activity related to
technology and finance firms. Hotel and warehouse construction should also strengthen,
although the pickup for stores is more tenuous.

Institutional building will advance 9%, continuing the moderate upward trend that’s been
established during 2014. The educational building category is now seeing an increasing
amount of K-12 school construction, aided by the financing made available by the
passage of recent construction bond measures. Healthcare facilities are expected to show
some improvement relative to diminished activity in 2014.
• Single family housing will rise 15% in dollars, corresponding to an 11% increase in units
to 700,000 (Dodge basis). It’s expected that access to home mortgage loans will be
expanded, lifting housing demand. However, the millennial generation is only gradually
making the shift towards home ownership, limiting the potential number of new
home buyers in the near term.
• Multifamily housing will increase 9% in dollars and 7% in units to 405,000 (Dodge
basis). Occupancies and rent growth continue to be supportive, although the rate of
increase for construction is now decelerating as the multifamily market matures.
• Public works construction will improve 5%, a partial rebound following the 9% decline
estimated for 2014. Highway and bridge construction should stabilize, and modest gains
are anticipated for environmental public works. Federal spending restraint will be offset
by a greater financing role played by the states, involving higher user fees and the
increased use of public-private partnerships.
Electric utilities will slide 9%, continuing the downward trend that’s followed the
exceptional volume of construction starts that was reported during 2011-2012. With more
projects now coming on line, capacity utilization rates will stay low, limiting the need for
new construction.
• Manufacturing plant construction will settle back 16%, following the huge increases
reported during both 2013 (up 42%) and 2014 (up 57%) that reflected the start of massive
chemical and energy-related projects. Next year’s volume remains quite high by recent
historical standards.

Outlook
While income and population growth are estimated to be very modest in the coming years,
construction and manufacturing activities are making solid advances and helping to improve the
growth rate for commercial waste management services. Federal budgetary problems have made
the future of EPA subsidies very uncertain, which is a major threat to the growth of the
environmental remediation sector. Continued suspicions that the Chinese economy may not be as
strong as it is reported to be is a major concern to the recycling industry since they are a major
importer of our recycled commodities. A continued recovery might not raise per capita solid
waste consumption back to its year 2000 high but it would increase industrial waste. This
combined with increased demand for goods made from recycled materials should boost the price
of recycled commodities.
Another closely related measure that is important for the waste management industry is
construction spending because it is an indicator for the amount of waste from demolition
activities that must be disposed of and because it signals the creation of new neighborhoods
which will require collection services. The annual rate of total construction spending in the
United States has been growing steadily since the depths of the recession, but it is still well
below the pre-recession high of $1.2 trillion.

Brevard County fronts the Atlantic Ocean for its full length. The county encompasses 1,276±
square miles near the mid-point of the Florida peninsula. Land area for the County is equal to
995± square miles, with the remaining 281± square miles representing inland waterways. The
County is approximately 72 miles from north to south and approximately 20 miles from the east
(the Atlantic coastline) to the west (the St. Johns River). The County is bordered on the north by
Volusia County, on the west by Orange and Osceola Counties, and on the south by Indian River
County. The population of Brevard County is approximately 550,823.
Business and industry in Brevard County make up a significant part of the economy, along with
agriculture. Brevard County is the home of the Kennedy Space Center and the former space
shuttle launch site. The Space Coast is known as a high-tech center of the Southeast. Brevard
County is ranked eighth in the nation for concentration of high-tech workers.
Incorporated communities include Cocoa, Merritt Island, Cocoa Beach, and Titusville. Viera and
Suntree, unincorporated communities, are also nearby.

Economic Outlook
According to the 2014-2017 Florida and Metro Florida Forecast published by the Institute for
Economic Competitiveness, College of Business Administration at the University of Central
Florida, the Palm Bay-Melbourne-Titusville MSA is expected to show moderate growth in the
economic indicators measured.
The Palm Bay-Melbourne-Titusville MSA will experience the most growth in the construction
and mining sector, with an average growth rate of 9.8% annually. The professional and business
services sector will see the second highest average growth in the MSA at 3.3% annually,
followed by both the education and health services and information services at 1.7% each,
annually. The Federal Government sector is the only sector expected to experience a decline at
1.6% annually.

Brevard County is experiencing an
increase in new development projects as follows:
• The Viera Company's first Development of Regional Impact (DRI) for the master-planned
town of Viera was approved in 1990 for approximately 3,000 acres of DUDA's Cocoa
Ranch property. Construction began on the first residential neighborhoods of Viera East
within the DRI in 1992. In 1995, the 6,000-acre central Viera expansion was approved by
Brevard County. In 2005, the company announced plans to complete its master-planned
community and received approval for the development of West Viera on approximately
11,000 acres on December 15, 2009.
According to online information, Viera is home to 23,000 residents, and more than 120
businesses. According to the development plan, upon build out, there could be up to
30,000 homes in Viera.

The Viera Company is proposing a project: the Viera Wilderness Park. The 5,112-acre
Viera Wilderness Park will provide wetland preservation and long-term habitat for many
of the area’s native birds and animals and will be managed in accordance with an
approved Habitat Management Plan. The park will be adjacent to the state’s 44,000-acre
River Lakes Conservation Area which protects the St. Johns River floodplain.
• According to online information, a one mile stretch of North Wickham Road, between
Land Andrew Drive and Murrell Road, is undergoing construction. This stretch is being
converted from a four-lane roadway to six lanes.
• The Melbourne campus of Eastern Florida State College will undergo a major expansion
in the next decade with the construction of six additional buildings to house new
programs designed to spur job creation and economic growth.
The $74.8 million plan was announced in August 2014. In all, five academic buildings
and a new student union will be constructed. The buildings will serve as homes for many
of the college’s 22 new academic programs that offer Bachelor Degrees and Associate
Degrees in business, health care and computer information technologies.

West Melbourne is experiencing new development in the form of a RaceTrac Gas Station
and an LA Fitness. Both of which will be developed at the intersection of Palm Bay Road
and Hollywood Boulevard.
• Northrup Grumman Corporation, an aerospace company, is planning an operation at
Melbourne International Airport that could bring 1,800 new jobs paying an average of
$100,000 a year, according to documents filed with Brevard County. The deal, known as
“Project Magellan,” also would include a half-billion-dollar capital investment —
buildings, machinery, etc. — by 2020.
The expansion will occur in multiple phases and the project began in June 2014. The first
phase will begin with the construction of a new 220,000 square-foot-office building and
the addition of 300 jobs. Potential follow-on phases include construction of additional
facilities totaling 500,000 square feet and 1,500 additional jobs. The company expects to
have added all the jobs by 2019.


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