Economic Snapshot Overview by Dr. Reid Cummings - March 2018
Posted on March 16, 2018 by Dr. Reid Cummings
Greetings, and welcome to the March 2018 Mobile Bay Economic Snapshot.
No matter which side of our beautiful Mobile Bay one visits, it seems that new construction activity is everywhere. Residential and commercial building permit data show robust activity in 2017 in Mobile and Baldwin Counties.
In Mobile County, there were fewer residential projects in 2017 than in 2016. A total of 529 residential building permits were issued, valued at $122.7 million. However, the average project value was up 2.6% in 2017 compared to 2016. In Baldwin County, 1,617 residential building permits were issued, valued at $287.7 million. This reflects an increase of 8.9% over 2016. Average residential project values were also 4.9% higher in 2017 than in 2016.
In Mobile County, there were also fewer commercial projects in 2017 than in 2016. A total of 110 commercial construction projects received permits valued at $193 million. However, the average project value of $1.75 million was significantly higher in 2017 than in 2016. In Baldwin County, a total of 404 commercial permits were issued having a total value of $91,016,633. While there were nearly 25% fewer commercial projects in 2017 than in 2016, average project values were a remarkable 76.6% higher in 2017.
Our region is experiencing one of the tightest labor markets in years. At the end of 2017, the Mobile County unemployment rate had fallen to 4.2%, just above the national average of 4.1%; the Baldwin County unemployment rate ended the year at 3.3%. The most recent U.S. Bureau of Labor Statistics jobs report points to continued tightening, with the addition of 313,000 net new jobs in February. Borrowing costs are also poised to increase going forward, as all indications are that the Federal Reserve will continue to raise interest rates in 2018. Whether our region will experience more construction activity in 2018 year-over-year remains to be seen. What does seem apparent is that with both continued tightness in the labor market and higher costs of money expected, construction costs on both sides of the Bay will likely continue to increase.
Until next time, from everyone at the Center, we wish you and yours all of the best.