Construction Industry Trends: February 2024 Roundup
Print this article
0%
February 2024 was a hot month for construction news. Reports of backlogs and spending slipping while manufacturing continues to grow have the digital printing presses working overtime. Couple that with spending on sports arenas and high-speed train tunnels, and there’s a lot to cover. Here are some of the biggest construction stories from February 2024.
Here We Go, Sports Fans! Arena Construction Across the Continent
It’s a great time to be a sports fan. Several sports arenas are either under construction or breaking ground across North America, including all the major sports: basketball, football, soccer, hockey, and baseball. Just a few years removed from a time when pro games were played in front of empty seats, some major projects are underway.
In Nashville, Tennessee, a joint venture between Turner Construction and AECOM Hunt broke ground in February on a $2.1B stadium. The future home of the Tennessee Titans, the 1.75M square-foot New Nissan Stadium will feature a translucent roof, sustainable materials, outdoor porches, 12,000 seats, and a 12,000 square-foot community space.
Swedish contractor Skanska is also getting to work, renovating MetLife Stadium ahead of the 2026 FIFA World Cup. Renovations include removing 1,740 seats and replacing them on a modular seating system to expand the field’s dimensions.
The Kansas City Current of the National Women’s Soccer League is proud to also have a project in progress—a first of its kind. The $117M CPKC Stadium (a J.E. Dunn and Monarch Build JV) will be the first arena built solely for a women’s sports team.
Arena contractors are also keeping busy in Los Angeles. The Clippers will no longer share an arena with the NBA’s Lakers, NHL’s Kings, and WNBA’s Sparks, moving across town to the $2B Intuit Dome, which includes 18,000 seats for Clippers fans to call their own. But, things won’t be quiet at the Crypto.com Arena—it’s also being renovated every offseason by PCL.
Three Canadian projects are underway, as well:
- The Rogers Centre, home to the Toronto Blue Jays, is seeing a major off-season renovation. It includes creating new facilities for players, premium clubs by home plate, new social spaces, and reconfiguring the lower bowl and its seating.
- The Calgary Flames will replace the Saddledome with a new arena, with construction headed by CAA Icon. The new arena’s site encompasses 10 acres and includes an event center, a community skating rink, and more. The project’s total cost is $926M.
- The Toronto Maple Leafs are renovating their arena, as well. The Scotiabank Arena Venue Reimagination project will cost $350M and involves upgrading premium spaces, redesigning the 100-level concourse, and major tech upgrades (like AI-enabled food ordering). Other upgrades include an additional store, a new broadcast studio, and more.
Reports Indicate Backlog Slips and Starts Level
February reports show the backlogs slipped across most sectors of the construction industry. A report released by the Associated Builders and Contractors in mid-February detailed that, overall, backlogs decreased from 8.6 months in December 2023, to 8.4 months in January 2024. This is down from the 9.0 months reported in January 2023.
Many experts believe that interest rates are the cause of the backlog slip. Developer financing is becoming more difficult to secure and the rising office vacancy rates are adding fuel to the fire. However, heavy industrial backlogs have grown from 8.4 to 10.9 months, pointing to manufacturing construction continuing to outpace much of the rest of the construction industry.
Construction starts aren’t booming either, though they’ve remained relatively stable, growing by just 1% in January 2024. This includes a 37.9% drop in multi-family starts. All signs point to high interest rates again, but many experts believe interest rate cuts in the latter half of 2024 will push some projects forward and create a rise in starts.
Overall Construction Spending Drops . . . Slightly
February reports highlighting January activity show that construction spending has dropped for the first time in 19 months. Overall, nonresidential spending dropped 0.4% between December 2023 and January 2024. And while the year-and-a-half-long climb is over, it’s probably not the sign of something serious. After all, spending is still up 17% from this time last year.
And the drop is likely attributable to just a few factors. The first factor, which is evident by the sectors’ spending that dropped the most, is severe weather. Bad weather has impacted highway, water supply, and wastewater projects. The other factor is the cost and requirements of borrowing. Also, the low demand for fledgling sectors of the commercial market including office and retail space makes them less attractive, at least for the time being.
Activity and spending are likely to pick up as we move further into 2024—rate cuts and weather permitting. Also, residential spending was up 0.2% from December 2023, and 5.4% overall since January 2023, so it’s not all doom and gloom.
Manufacturing Construction Still Red Hot
Despite some signs of a slowdown and even some electric vehicle uncertainty, the manufacturing construction sector remains positive. A couple of projects took major steps forward in February 2024 (and one doesn’t involve EVs).
Toy manufacturing giant The Lego Group has chosen its joint venture contracting team to build its $1B manufacturing facility. The Richmond, Virginia plant will be built by Gray Construction and Hourigan Construction.
A press release dated June 2022 details the facility’s plans and project work did begin in Spring 2023. However, assembling the Lego team wasn’t as straightforward as snapping blocks together, and the GC was chosen in February 2024. The Richmond facility’s plans include 13 buildings and 1.7 million square feet.
Scout Motors is also throwing its hat into the manufacturing ring. The US-based (yet Volkswagen Group-owned) vehicle manufacturer broke ground on an electric vehicle plan in Blythewood, South Carolina. Plans were originally held up in the fall of 2023 due to environmental concerns, but the US Army Corps of Engineers approved the plans in January. The $2B plant will span roughly 1,600 acres and produce around 200,000 EV trucks and SUVs annually.
Kiewit-Shea Collab Set to Build $1B Amtrak Tunnel
Amtrak’s Baltimore and Potomac Tunnel system is aging, and its $6B plan to replace it just took a major step forward. Amtrak announced that it tapped the joint venture firm consisting of Kiewet and J.F. She Construction to head up its Frederick Douglass Tunnel project, with an estimated cost of more than $1B.
According to Amtrak, the current Baltimore and Potomac Tunnel is the biggest passenger rail bottleneck in the Northeast. The Frederick Douglass Tunnel represents one of three phases required to relieve the bottleneck, with the total project costing $6B.
Kiewit-Shea’s portion of the project will replace most of the tunnel system. Once complete, the tunnel will contain twin single-track rail systems with high-capacity tubes, allowing trains to travel up to 100 MPH—a major uptick from the 30 MPH the current tunnel system allows. The project is expected to start in 2026 and wrap in 2035.
Posted By
