Georgia’s ’09 Outlook – 4% Decline Expected

By Scott Judy

Like Florida and the other states in the region, the value of Georgia’s overall construction total has declined significantly in the past year. The state registered approximately $26.7 billion in construction in 2007, for example, but due mostly to a severe downturn in the residential market last year, saw its 2008 total construction figure fall by about $8 billion to just $18.7 billion.

With that in mind, the 4% decline that McGraw-Hill Construction expects for Georgia predicts that the worst may be over, for now.

Georgia’s nonresidential market is forecast to decline by 4% overall in 2009, to an $8.1 billion total. Like Florida, however, the commercial and industrial sub-sector will be the hardest hit. That market could decline by 12%, according to McGraw-Hill, to about $3.7 billion in new project starts. That would compare to last year’s nearly $4.2 billion total.

Institutional construction, meanwhile, should see a 3% uptick during the coming year, with nearly $4.5 billion in new project starts expected.

State residential construction will remain moribund, however. Last year, 2008, saw a major decline in the residential market, from 2007’s $11.8 billion total to just $6.6 billion. (For perspective, Georgia’s residential market had tallied $16.8 billion in 2005 and $16.3 billion in 2006.)

McGraw-Hill is projecting a 7% overall decline for the state’s residential market, with about $6.2 billion in new contract starts anticipated.

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Meanwhile, nonbuilding construction is expected to be positive overall, with McGraw-Hill Construction expecting a 4% increase during 2009. If that comes to pass, that would result in about $3.7 billion in new contracts, ahead of last year’s nearly $3.6 billion total.

Public works construction will be roughly flat compared to 2008, with a 1% downturn expected, for about a $3.5 billion total. Electric utility construction should awake from the doldrums, however, with about $216 million in new contracts expected. That would be more than the total amount of electric utility work that Georgia has experienced over the previous four years combined.