Construction developments in Texas are in line with industry predictions.

In Taxes construction developments are in line with industry predictions
  • Author: Mohsin Khan
  • Posted On: September 30, 2022
  • Updated On: July 10, 2023

In times of global turmoil and uncertainty, it is up to domestic industries to drive the economy forward. When one sector produces a surplus, employs generously, and provides goods and services, the country benefits from a chain reaction.

Currently, the construction industry plays a significant role in the rejuvenation of post-pandemic America; luckily, it is trending upwards.

While it is important to note that economic prosperity doesn’t spur simultaneously across the nation, it takes only several states to create traction. Looking at relevant industry reports, it seems Texas and Florida are leading the construction boom in the south.

This development has far-reaching implications for housing, commercial real estate, and the economy. So let’s review the current state of the sector in detail.

Starts increase across industries.

While Amazon has announced its cut on operations, the effect on the warehouse industry should not materialize before 2022. In the meantime, the short-term projection for the warehouse sector is upward.

Although construction rates of new real estate stall compared to previous years, they are still at a healthy 16% growth.

Conversely, the manufacturing sector experienced less growth, but the upcoming forecasts are hugely optimistic. While 2022 saw an increase of only 3%, the future looks brighter due to renowned interest in bringing back more manufacturing plants.

Public real estate and entertainment venues

Currently, there are 340 projects related to federal, state, and municipal construction, including fire stations, city halls, recreation centers, and improvements to existing public spaces.

Similarly, 36 projects, with an estimated cost of 4.2 billion, are designated for entertainment, culture, and sports. The south will see an array of new wedding venues, performing arts centers, and sports complexes in the next year alone.

Residential activity drives the sector.

While outmigration is sweeping over the west and northeast, the south is seeing steady net migration into the region. Given such developments, it is entirely likely that residential trends are going to continue. Currently, activity in this sector is driving the overall momentum of the industry.

Homebuilders are developing attractive properties like never before. New homes in Texas will continue to enter the market despite macroeconomic developments.

With residential, however, come other accompanying sectors as well. Education, expected to reach $25.5 billion, saw the most significant increase year-over-year, with 18% growth.

Given the relief over the pandemic and increased interest in residential properties, the construction of K-12 and college facilities feels justified.

For example, Texas approved a $1.2 billion bond to renovate middle schools and build new elementary schools in the district of Fort Worth alone.

Such developments reflect the influx of new residents, as numbers of projects double over the previous year, with many affordable projects in Austin and luxury real estate in Galveston.

Interestingly, Austin leads the residential market development, with 31.1 single-family building permits per 10.000 people. It is the highest growing residential hub in the south and the entire country. These figures represent the first quarter of 2022 but are impressive nonetheless.

How will these developments affect the economy?

Texas representatives insist that urban development and public policy are responsible for drawing new businesses to the state. Investing in infrastructure invites corporations, which in turn attract quality workers.

With well-functioning work areas, transport, housing, and public facilities, Texas is positioning itself as an economic leader in the south.

Significantly, to create these opportunities in the first place, the construction industry benefits the entire economy by feeding other sectors. Call it trickle-down job creation, if you will, as one project leads to countless others.

Construction makes up 4.1% of the U.S. gross domestic product. In Texas, with $100 billion for 2020 alone, the industry contributed 5.3% of the state GDP.

Similarly, employment figures get heavily influenced by the sector, with over 700,000 workers employed in Texas alone. These well-paying jobs move the economy forward and create stability and security for millions of Americans.

According to Business Roundtable, a single dollar invested in infrastructure creates $3.8 for the economy over the next 20 years.

However, pondering what comes first is unproductive—population growth and business influence the need for infrastructure and vice versa. At the end of the day, what we see in one number reflects another, measured or in the making.

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Author: Mohsin Khan

Mohsin has worked as one of the experienced editors with ConstructionHow since 2020 with a total span of 5 years of experience in business PR, boasting a remarkable professional trajectory, he has collaborated with entrepreneurs and startups, and certain publications over the last few years. His unwavering interest lies in the construction industry and related materials. He believes in creating functional and aesthetically pleasing buildings, and homes that fall under the right budget. With a wide range of experience in construction, he also tapped into DIY and home improvement projects based on his extensive set of knowledge in the industry.