With all the grim news about the U.S. economy over the past few months, it may seem like an odd time to publish an article on the fastest-growing local market areas. However, you can find some real economic gems among the 300-plus metropolitan statistical areas (MSAs) in the United States by using free economic metrics to measure the growth of the electrical construction industry in any geographic market: electrical contractor employment, building permits, and population growth. Other key metrics to consider are industrial employment, unemployment data, and gross metropolitan product (GMP).
There’s a direct correlation between the number of new residents moving into an area and how many building permits home builders pull — and an equally tight link between new housing developments or apartment complexes and the light commercial, retail, and institutional (e.g., K-12 schools, hospitals, and medical) buildings these new residents will need.
Check out this gallery, which highlights 10 large metros (population of 1 million or more in 2019) and 10 smaller metros (population of less than 1 million) tracking well above — and, at times, double or triple — the year-over-year (YOY) or year-to-date (YTD) growth rates of their states as well as the nation as a whole.
Texas boasts three large metro areas in our picks for the fastest-growing large markets: Dallas-Fort Worth-Arlington; San Antonio-New Braunfels; and Austin-Round Rock. Austin is without a doubt the fastest growing of the Texas markets, in part because of its explosive population growth and the amount of commercial construction activity downtown and in its suburbs. It attracted 61,586 new residents from 2018 to 2019, according to the latest population data from the U.S. Census Bureau. When you translate that growth to the city’s net migration rate (the number of new residents moving into or out of a geographic area), it comes out to a rather remarkable 127 new residents per day. All this population growth attracts commercial office developers. In fact, before the coronavirus hit, the Austin Business Journal said more than 30 office towers were either on the drawing boards or in early stage of development. Austin’s industrial market will soon be getting a major boost, too, with the recent announcement that Tesla’s Elon Musk will be building one of his gigafactories there to manufacture electric vehicles.
The other large MSAs that made our Top 10 list are Jacksonville and Tampa-St. Petersburg, Fla; Phoenix-Mesa-Scottsdale, Ariz.; Raleigh, N.C.; Charlotte-Concord-Gastonia, N.C.-S.C.; Nashville-Davidson-Murfreesboro-Franklin, Tenn.; and Salt Lake City. Check out the numbers for Phoenix. Not only did the Valley of the Sun attract 98,994 new residents from 2018 to 2019, but single-family building permit activity is also up approximately +11% through June 2020 with 1,335 new permits on the books.
When you look at the smaller markets with less than 1 million in population growing faster than their state and the national averages, it becomes quickly apparent that many of them are in vacation areas along the coasts or in the mountains. Florida had half of these smaller MSAs: Cape Coral-Ft. Myers; Deltona-Daytona Beach-Ormand Beach; Pensacola; Port St. Lucie; and Ocala.
While the explosive growth in most of Florida’s major and smaller metros is well documented, you may not realize how fast some smaller MSAs in Utah are growing. The state’s Ogden-Clearfield, Provo-Orem, and St. George metros are quietly attracting thousands of new residents. St. George, a smaller metropolitan area in the southwest corner of the state between the Nevada state line and Zion National Park, is popular with retirees and saw its 2019 population grow to 177,556 with new 5,989 residents. The other Utah metros mentioned here each attracted more than 10,000 new residents from 2018 to 2019. Also on this list of fast-growing small metros are Greenville-Anderson-Mauldin, S.C., and Killeen-Temple, Texas.
You don’t need an MBA in economics to find or utilize the data mentioned above to analyze growth in your local market. The U.S. Census Bureau publishes monthly updates of local, state, and national building permit activity at www.census.gov/construction/bps/. Population data is updated annually by the U.S. Census Bureau at the county, MSA, state and national level and is available at www.census.gov/data/tables/time-series/demo/popest/2010s-total-metro-and-micro-statistical-areas.html.
The U.S. Bureau of Labor Statistics offers monthly updates on employment activity by industry at www.bls.gov/sae/data/. BLS publishes monthly electrical contractor employment data at the national level. To estimate how many electrical contractors are working in a local market, find the BLS construction employment data for that geographic area at www.bls.gov and multiply it by 0.13, which is the historical average (going back 20 years) of the percent of electrical contractors as a portion of national construction employment. Local markets percentages will of course vary from this figure, but it will give you a rough idea. If you don’t have the time to pull all this data together, EC&M’s sister publication, Electrical Marketing newsletter (www.electricalmarketing.com), offers these numbers as well as other local market data as part of a $99 annual subscription.
As the nation recovers from this economic calamity, electrical contractors, engineers, facility maintenance personnel, and other electrical professionals will have a bigger incentive than ever to track the health of the local economy where they live and work to see how it’s positioned for a recovery over the next few months and into 2021. The data discussed in this article can help you do that.
