This past fall, the U.S. Census Bureau announced with great fanfare that America's population had surpassed 300 million. I found this interesting, particularly given that it squares with a little known but important new report from the Brookings Institute about how projected population growth will drive demand for new housing and commercial and industrial space the next quarter century.
Just look at our population growth history. If we go back to the Jamestown settlement and the Pilgrims' first landing in Massachusetts, it took about 300 years for our population to grow to 100 million (1915). But it only took 52 years to double to 200 million (1967), and a scant 39 years to increase by 50% to 300 million (2006). The Census Bureau expects the headcount will be 400 million by 2043, only 26 years away.
With that backdrop, the Brookings Institute report delivers some striking projections about space demands. They believe that by 2030, one-half of the buildings in which Americans live, work, and shop will have been built after 2000.
Specifically, the country had about 300 billion square feet of built space in 2000. But by 2030, we will need about 427 billion square feet to accommodate the projected growth. About 82 billion of that will come from replacing existing space, and 131 billion will be from adding new space. This means half of that 427 billion feet of space will be built over the next 25 years.
Residential growth is even more striking. Most of the space built between 2000 and 2030 will be residential space, with the largest mix being individual homes. More than 100 billion square feet of new residential space will be needed by 2030. But as the report points out, the commercial and industrial sectors will have the most new space on a percentage basis, as more than 60% of the space in 2030 will be less than 30 years old.Location, location
So where will most of this new growth occur? The South and West, of course. There is a tremendous variation in the total amount of building between regions.
In the Northeast, less than 50% of the space in 2030 will have been built since 2000, but that number jumps to 87% in the West, which will see nearly a doubling of existing built space. The fastest-growing southern and western areas, such as Nevada and Florida, and metropolitan markets like Raleigh, N.C., and Austin, Texas, will see even more significant growth.
In other areas, the report sheds some positive light on the projected demand for industrial space in the Midwest, which will outpace other regions. After California, which is the leader in square feet of new industrial construction, the next four largest builders of industrial space are all Rust Belt states: Ohio, Michigan, Illinois, and Indiana.
This is good news if the projections are correct, given what a difficult time this area has had as manufacturing jobs have migrated overseas. By 2030, 70% of the Midwest's industrial space will be less than 30 years old.
What does this mean for us? National and state associations in the concrete industry, coupled with strong individual promotion and support from cement, aggregate, and admixtures partners, have done an excellent job of continuing to promote concrete as an alternative to wood, brick, metal, and other basic building products.
Annual ready-mixed concrete production has increased from 1 cubic yard to more than 1.5 cubic yards-per-person in just the last several years. Our projected population growth and resulting space demands point to continued growth.
— Pierre Villere is president and managing partner of Allen-Villere Partners. Contact him email@example.com telephone 985-727-4310. For more, visitwww.allenvillere.com.