South Carolina’s ’09 Outlook – Declines Across the Board

By Scott Judy

Unfortunately for contractors and other industry firms working in South Carolina, there’s little positive to anticipate here. McGraw-Hill Construction is predicting an 8% overall decline in new state construction contracts, with drops in all three of the major construction categories.

The expected 8% downturn would result in roughly $9.8 billion worth of new contracts, compared to 2008’s $10.7 billion total.

Of the three major categories, nonresidential will experience the steepest declines, says McGraw-Hill Construction. The company expects to see a 12% drop in South Carolina’s nonresidential contracts during the coming year, for a $3.4 billion total. That compares to last year’s $3.8 billion estimate for this category.

Within nonresidential, McGraw-Hill anticipates that the commercial and industrial market will shed 13% in volume in ’09, resulting in roughly $1.5 billion in new projects, down from 2008’s nearly $1.8 billion. The market for institutional buildings won’t fare much better, with a 10% decline expected there. If correct, that would result in about $1.9 billion in new institutional contracts – still the second-highest dollar volume for this market in the past six years.

Like everywhere else, South Carolina’s residential market is well off the volume experienced during previous years, and is forecast to drop a bit further in ’09. McGraw-Hill Construction is forecasting a 5% downturn for residential, for about $4.5 billion in new contracts during the coming year. The state’s residential total for 2008 was nearly $4.8 billion. The 2009 forecast is approximately half of the value registered in 2005.

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McGraw-Hill expects a 10% overall decline in South Carolina’s nonbuilding market during 2009, for a roughly $1.9 billion total. Even so, that total would mark the second-highest dollar volume since 2004.

Within the overall nonbuilding sector, however, lies some good and bad news. Public works construction is the bad news, where McGraw-Hill anticipates a 17% drop in contract value compared to 2008. The company is projecting about $1.7 billion in new public works contracts in 2009, down from 2008’s $2.1 billion tally.

Electric utility construction is the only category that McGraw-Hill Construction expects to improve during the coming year. The company is projecting the value of new contracts in this market to jump up from just $7 million in 2008, to approximately $159 million during 2009.