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2019 LCK Construction Trends Report

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South Carolina Construction Starts are Down

Key Takeaways

Statewide construction starts have decreased across most sectors over the past year while indicators tracking pre-development activities are up. Construction activity is expected to remain strong in 2020 with only a moderate slowdown over 2019.

Construction costs across all sectors are expected to remain steady in South Carolina. Volatility in material pricing has diminished while the backlog of under construction work remains strong.

LCK Construction Tip: Workforce resources continue to be scarce despite the slowdown in construction starts. Recruitment of design and construction talent remains a challenge. Employers are competing for the best means to attract and retain staff.

Overview

Construction Starts: Statewide construction starts have decreased in four of six key sectors over the past year. Starts for government buildings increased in all of the state’s major markets except Columbia. Commercial construction starts have been strong in both Columbia and Charleston. Manufacturing starts decreased across the state.

Construction Workforce: According to the Bureau of Labor Statistics, as of August 2019, there are 101,700 construction employees in South Carolina, representing 4.66% of the total nonfarm employment. Construction employment has increased by 300 jobs over the last 12 months.

U.S. Material Pricing: Pricing volatility which began in early 2018 has stabilized. Over the past three months pricing has decreased less than one percent for the following materials: pre-engineered metal buildings, steel pipe & tube, steel mill products, insulation materials, and diesel fuel. Crushed stone and gravel is the sole material sector seeing an increase of more than one percent. Pricing for materials that drove earlier market volatility are trending downward while other materials are stable. Stability is expected to continue unless unexpected tariff activities drive costs upward. 

U.S. Construction and Development Lending: According to the FDIC, construction and development loan volume totaled $357 billion as of June 30, 2019, up $10.3 billion since June 30, 2018. While volume is increasing, the rate of increase continues to ease. Percent change on a trailing-twelve-month basis is at 1.95% compared to a high of 9.24% in the second quarter of 2015.

U.S. Architectural Billings: The year-to-date AIA Architectural Billing Index for architects in the south is 52.3 which indicates increased design activity and points toward growth in future construction starts. (A score of less than 50 indicates decreased billing activity.)

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2019 LCK Construction Trends Report

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