California, trying to cope with the recent decline in the economic growth, is witnessing a mixed result in its construction sector. On the basis of researcher McGraw Hill’s construction analysis, in the early 2014 (January and February) residential construction in California, including apartment buildings, single family and multi-family housing, were flat with a slight 3% drop in comparable construction projects, compared to 2013.
Though there was a drop in residential construction sector, non-residential construction comprising of offices, government, manufacturing, retail, educational, healthcare, hotels, warehouses, recreational, and religious structures took a large hit with a 30% downturn. Besides, non-building construction including streets, highways, bridges, dams and reservoirs, along with harbor developments, sewage and water supplies, power utilities and communication systems hiked with a two month total of projects amounting to a cumulative 52% gain.
The rocky start early this year might be an effect of the staggered overall construction activity of the state and does not necessarily project the result of the entire year. It is suggested that this can be outcome of the high state taxes, a confused healthcare introduction, and Governor Jerry Brown’s priorities to spend hundreds of millions of dollars on bullet trains. The concept of bullet trains seems peculiar as California has more automobiles on its highways than any other state in the country.
The total estimated construction market expenditures are 8% dollar-wise over last year at a projected total of $6,583,624,000 and the biggest potential project is the Monterey Shale. As per the University of Southern California, once this project can provide the state with $75 billion in additional revenues, and around 150,000 additional employees. Though Governor Brown is committed to this project, he has not yet declared his decision officially.