Construction starts in SoFla continue to plummet

Construction fell 33%, its second monthly decline, as contractors face challenges with supplies and labor

Construction in South Florida fell for the second straight month (Credit: iStock)
Construction in South Florida fell for the second straight month (Credit: iStock)

Construction in South Florida is feeling the brunt of coronavirus.

South Florida’s total construction starts fell significantly for the second straight month, dropping 33 percent in April to $684.4 million, down from $1.03 billion in April 2019, according to a report by Dodge Data & Analytics.

Residential construction fell 35 percent to $390.4 million, a year-over-year decrease from $600.4 million. Nonresidential construction declined 31 percent to $294.1 million from $427.6 million in April 2019.

In March, overall building construction fell 53 percent to $561 million, compared to March 2019, according to Dodge Data & Analytics.

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Nonresidential buildings include office, retail, hotels, warehouses, manufacturing, educational, healthcare, religious, government, recreational, and other buildings, while residential buildings include single-family and multifamily housing.

Construction was designated an essential business by the state of Florida and allowed to continue during the pandemic. Yet, contractors and subcontractors still reported challenges, such as rising material costs and difficulties with obtaining supplies produced in China. Some contractors said they had to find new suppliers since businesses such as marble slab companies were deemed non-essential and were required to shut their doors.

Other real estate projects had to stop construction temporarily for not following health guidelines. Two large Miami Beach projects were ordered to suspend construction in early April after failing to comply with CDC guidelines.

The drop in construction starts could also be due to a decline in new permits. Most cities in South Florida stopped processing new permit applications for one to two months, which could have an impact on contractors and developers by late August or early September.

“There’s a gap that’s coming,” Peter Dyga, president & CEO of Associated Builders and Contractors, previously told The Real Deal. “At some point that’s going to hit the industry.”