Finally, 2013 has marked the end of the construction recession, as housing and overall put-in-place construction have risen for the first time in just the last year.
Six years is how long the construction recession affected the concrete industry. And it dragged on, as we didn’t see an improvement in volumes until 2012, and they were minimal. So what does the next decade hold?
I like to gaze into my crystal ball once in a great while. The truth is, my crystal ball is nothing more than the interesting work that is done by thought leaders and futurists who research and publish what they believe are the trends before us. So I was interested to read the work of two researchers who analyzed and broke down the U.S. into seven regions, each with its own common economies, and three huge metropolitan areas that represent economic engines of their own, often comparable to one or more of the seven regions.
There were a couple of surprises. The fastest growing region over the next decade will be the Third Coast, which follows the coast of the Gulf of Mexico from the Texas/Mexico border to the tip of the west coast of Florida, and inland about 50-75 miles. This includes the booming Houston market, offshore oil center New Orleans, and the vast petrochemical and refinery infrastructure. Its population is projected to grow more than any of the 10 regions, at 15.5% between now and 2023.
N.Y. and L.A. trail
Another surprise is the three giant metropolitan areas of New York, Los Angeles, and Miami. (Other large cities like Chicago were integrated into their regions, as their economies are not considered to be independent of their surrounding geography.) It appears these three metro areas have had their day in the sun, as they are only projected to grow by 8.6%, 10.9%, and 9.3%, respectively, by 2023, near the bottom of the 10 regions. In contrast, Houston is expected to grow into a major global city, as it is now the world’s oil capital.
The next big growth area after the Third Coast is the Inland West region. This is basically a vertical line from about the center of the three Pacific Ocean states eastward, ending on a vertical line through the middle of New Mexico, Colorado, and northward. Inland West is expected to grow by 14.6%, followed by the Great Plains region to the east of it, running to about the Mississippi River. This region’s population is expected to grow by 13.8%. The Left Coast, or the coastal halves of the three Pacific Ocean states, should grow by 12.2%.
The three remaining regions were called the Southeast Manufacturing Belt, the Great Northeast, and the Great Lakes regions, which are expected to grow 10.7%, 10.3%, and 8%, respectively, trailing the Gulf and western states.
This gaze into the future is important to anyone who is developing growth strategies for their construction materials businesses, and wondering where the best opportunities lie. There are no surprises here. The Gulf Coast and western states still offer the greatest growth opportunities, and reinforce the old expression from the 19th century: “Go west, young man.”