Volume 50, Issue 4 - April 2015

NewsAnalysis:EASTERN MARKET

Northeast "Building Boom" has Glazing Industry Well-Booked

By most accounts, the Northeast construction industry has transitioned from “recovery” to “recovered.”

According to Dodge Data & Analytics, nonresidential building in the region will increase for the third straight year, this time by 10 percent—as opposed to a 9-percent spike in 2014 and a 4-percent jump the year before. The multifamily sector specifically saw increases of 42, 33 and 42 percent, respectively, the past three years.

That’s all good news for the region’s contract glaziers. They’re seeing healthy backlog buildup and a diverse group of sectors demanding work.

Four of the top nine companies featured in USGlass magazine’s listing of the nation’s top contract glaziers (see page 28 of the March 2015 issue) are located in the Northeast. Likewise, three Northeast states were among the eight most represented on the list. New York was the second-most-represented after California, with Nanuet, N.Y.-based W&W Glass topping the list in that state. W&W saw its backlog double in 2014.

Karas & Karas (K&K) of Boston, meanwhile, ranked second in the region and saw a 60-percent increase in backlog in 2014.

“This building boom has legs,” says Jay Argus of K&K, adding that he can see it extending at least another four to five years based on the projects his company has been contacted about.

Office construction is one sector that is set to thrive in the near future in parts of the Northeast. Commercial real estate services firm Cushman and Wakefield projects Boston and New York will see double-digit rental growth in the office sector this year.

Office construction saw a 32-percent increase in the Northeast in 2014, according to Dodge. And in areas where office construction is lagging, such as New Jersey, other sectors are picking up plenty of the slack.

George O’Donnell, president of Metro Glass, based in New Brunswick, N.J., says the market in New Jersey is “the best it has been in six years or so,” with the top sources of work being the high-rise, multifamily residential sector.
“Every developer in the state is rushing to get a building up,” says O’Donnell.

The higher-education institutional sector has also picked up. Rutgers University alone “has six buildings in various stages of construction now, with several more planned for the next few years,” according to O’Donnell.

“Pharmaceutical companies are also renovating and putting on additions throughout the state.”

Argus says the life sciences and high-rise residential sectors have been big in the Boston area, as well as offices and colleges.

He says that in addition to the overall economy picking back up since the recession, the diversity of the area in terms of its various sectors contributes to the thriving construction market—which he says is fully recovered and booming.

That logic can be applied to other metropolitan areas in the Northeast as well, which appear to be set for continued success for at least the next couple years.

Every state in the Northeast besides Vermont saw an increase in construction employment over the 12 months of last year, according to the Associated General Contractors of America. New Hampshire led the way in percentage with a 6.9-percent increase over the year before. Pennsylvania and New York added the most total jobs to the industry in the region—8,800 and 8,700, respectively.
Trending North
Building Construction Starts in Northeast
Millions of Dollars 2011 2012 2013 2014
Nonresidential 32,991 31,573 32,880 35,906
Commercial 10,721 11,801 12,957 15,374
Industrial 1,502 1,375 1,606 996
Institutional 20,768 18,398 18,316 19,537
Residential 16,208 20,679 26,868 33,200
Multifamily 7,571 10,720 14,278 20,272
Total Construction 68,784 73,656 87,922 89,929
Percentage Change 2011 2012 2013 2013
Nonresidential -8% -4% 4% 9%
Commercial 15% 10% 10% 19%
Industrial 43% -9% 17% -38%
Institutional -19% -11% 0% 7%
Residential 0% 28% 30% 24%
Multifamily 26% 42% 33% 42%
Total Construction -7% 7% 19% 2%


—Nick St. Denis



USG
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