Need to map out which counties in your market area may offer the best growth opportunities this year? The U.S. government offers a surprising amount of free market data that can point you in the right direction. The U.S. Census Bureau; Bureau of Labor Statistics; and Bureau of Economic Analysis offer free data on employment, building permits, housing starts, and general business activity that can help you discover pockets of potential construction activity before projects actually start breaking ground.
Two good economic indicators from the U.S. Census Bureau track population growth and building permits on a county, metropolitan statistical area (MSA), state, and national level. EC&M’s editors used this data to identify and rank the fastest-growing counties in the United States (see Table below). Let’s look at these two leading economic indicators in more detail.
Population data
Population growth (or decline) directly impacts the electrical construction industry because new residents need places to live, shop, go to school, worship, work, and play. When folks move into or leave a local market area, it immediately affects the potential demand for the construction and renovation of homes and apartments, schools and colleges, churches, synagogues and other houses of worship, hospitals and medical offices, strip malls, government offices, sporting facilities, and other retail, commercial, and institutional construction.
With the U.S. Census Bureau’s population data (released annually), you can quickly identify where the most residents are moving into or leaving a geographic area. The Map below uses this data to show you which counties have added or lost population over the past 10 years and clearly illustrates the massive population shift the United States is experiencing — with tens of thousands of people moving from areas in the Midwest and Northeast to Sunbelt locations in the Carolinas, Georgia, Florida, Texas, and Arizona as well as Intermountain states like Colorado, Idaho, and Utah.
The population growth in the fastest-growing counties in these states is staggering. For instance, from 2015 to 2020, the Phoenix metropolitan area in Maricopa County, Ariz., added 404,658 new residents (+9.7%), and Texas had five counties with population increases of over 100,000 in this period: Travis County (+120,500) and Williamson County (+110,127) in the Austin metropolitan area; Harris County (+181,694) in the Houston area; Collin County (+157,055); and Bexar County (+132.012) in the San Antonio metropolitan area.
Building permits
Construction economists consider building permits available each month from the U.S. Census Bureau to be a reliable indicator of future construction activity because home builders generally won’t purchase a permit until they are serious about building on a lot. Even if you don’t do much in the residential construction or renovation market, you should still watch building permits because once new homes get built, retail, commercial, and other types of construction tend to follow.
As we mentioned earlier, building permits are closely tied to population growth, and most of the market areas in the table ranked high in both population growth and increases in single-family building permits from November 2020 to November 2021. Maricopa County was a statistical monster in this category, adding 4,262 single-family permits for a +20.6% year-over-year (YOY) increase. Other housing hot spots are Tampa-St. Petersburg’s Pasco County (+3,959 permits); Houston’s Montgomery County (+3,757 permits); Austin’s Williamson County (+3,456 permits); San Antonio’s Bexar County (+3,107 permits); and Las Vegas’ Clark County (+3,201 permits).
Construction economists also like to look at how many building permits were pulled in a market area for every 1,000 residents so they can take size out of the equation and evaluate large, medium, and small areas at the same level. When you do that, some small markets generate some eye-popping data that dwarf the U.S. national average of 2.85 permits per 1,000 residents. Five small counties with less than 250,000 residents produced a permit-per-1,000-residents number of more than 20, led by Sumter County, Fla. (26.28) — home to The Villages mega-senior citizen development, and Walton County (26) on Florida’s panhandle in the Crestview-Fort Walton Beach-Destin, Fla.
Analyzing market data will also help you see that it’s not just the biggest metropolitan areas that provide the most construction or renovation opportunities. Of the 50 counties that EC&M’s editors selected for this article, only 12 had more than 1 million residents. Ten counties had less than 250,000 residents, proving that the small can indeed be mighty when it comes to electrical construction market potential.
If you need the local market data discussed in this article, Electrical Marketing newsletter (www.electricalmarketing.com) offers it at the county, metropolitan area, state and national level for a $99 annual subscription.
