The end of 2015 saw a serious slowdown in South Florida construction spending, but that didn’t stop developers from putting more money into building here than almost anywhere else in the nation last year.
A total of $6.3 billion was put into South Florida construction contracts by the end of the year, according to a new Dodge Data & Analytics report. That means the region was No. 2 for construction spending in 2015, outpacing No. 3 — Dallas, Texas — by $300 million. New York ranked at the top.
Although there was a veritable outpouring of development dollars in South Florida last year, the contracts started to dry up by year’s end. A lot of that was thanks to the residential market, which took a heavy hit for construction contracts awarded during the winter months.
December, for instance, saw a 3 percent reduction in spending year-over-year. That’s coming off of an overheated spring where residential spending was growing by double-digit percentages compared to 2014.
The tri-county area in 2014 saw an explosion of building, both on the residential and commercial sides of the market. Multifamily projects in particular had a 121 percent increase in building than in 2013, while commercial building as a whole was up 51 percent.
Now, South Florida is facing headwinds from economic troubles abroad in regions like South America — a major feeder market for buyers of local real estate. Home sales took a hit at the end of the year, and analysts say poor global economic conditions could have a chilling effect on new industrial construction.
“The construction start statistics do show some deceleration for the commercial building sector at the national level during 2015, after the substantial gain witnessed during 2014,” Robert A. Murray, chief economist for Dodge Data & Analytics, wrote in the report. “The recovery for commercial building has so far been hesitant, with periods of increased activity often followed by a pause.”
The No. 1 spot, however, had a different experience. New York City saw $34.9 billion worth of projects break ground last year, a 66 percent jump compared to 2014. A large chunk of that is thanks to a 95 percent spike in commercial building, while the residential side also saw a considerable 55 percent jump year-over-year. — Sean Stewart-Muniz