This story is the second in a series looking at the health of the construction industry in regions across the country.
Total housing starts in the western US region rose 13% last year to $223.73 billion, roughly in line national startup growth 14%, according to a Dodge Data & Analytics Construction Outlook webinar.
The increase was largely due to manufacturing, education and data center projects. For 2022, Dodge forecasts production will reach $14.39 billion, up 47% from 2021.
“Manufacturers are looking for a more reliable supply chain, so a concerted effort to bring more chipmakers to the US has begun,” Dodge senior economist David Reaves said during the webinar.
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Sebastian Obando/Construction Dive, data from Dodge Data & Analytics
Beginnings in manufacturing, which include electric vehicle factories, chip factories, food production plants and pharmaceutical laboratories, have been on a wild ride since the pandemic began.
In 2020, production starts fell to $1.74 billion, down about 37% from 2019’s $2.74 billion level. But that rebounded to $9.81 billion in 2021, and according to Dodge, starts in the sector are expected to more than sevenfold in 2022 from pandemic lows.
The two largest launches in the six months ended March were Intel’s $9.98 billion Chip Factor project and Taiwan Semiconductor Factory, both in Arizona.
Largest begins in the west from October 2021 to March 2022
| Project | Type | location | start month | value |
|---|---|---|---|---|
| Intel FAB 52 & FAB 62 chip factories | manufacturing | Chandler, Arizona | February 2022 | $9.98 billion |
| Phase 1 of the semiconductor factory in Taiwan | manufacturing | Phoenix | October 2021 | $5.98 billion |
| Terminal 1 and streets Ph I | Airport | San Diego | November 2021 | $2.35 billion |
| Expansion of the Los Angeles Museum of Art | education | los Angeles | December 2021 | $650 million |
| Intel manufacturing facility upgrades | manufacturing | Rio Rancho, New Mexico | February 2022 | $550 million |
| Go to SuperNap Data Center Tahoe Ph II | data center | Sparks, Nevada | March 2022 | $505 million |
| Connection station of the airport subway | Airport | los Angeles | October 2021 | $471 million |
| Park 303 PH2 | warehouse | Glendale, Arizona | March 2022 | $460 million |
| Amazon Fulfillment Center Project Base | warehouse | Wood Fire, Oregon | November 2021 | $451 million |
| Fontainebleau Las Vegas renovations | hotel | Las Vegas | December 2021 | 400 million dollars |
SOURCE: Dodge Data & Analytics
For all of 2022, Dodge projects education will reach $16.5 billion, up 6% from 2021.
The $650 million expansion of the Los Angeles Museum of Art, which is included in the education category, was the fourth largest construction project since October 2021, according to Dodge.
Overall hospitality in the West Region remains a fraction of what it was before the pandemic. For all of 2022, Dodge hotel and motel housing starts in the West will reach $2.38 billion. That would be a 14% improvement from 2021, but would still be about 45% below 2019’s level of $4.32 billion, according to Dodge.
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Sebastian Obando/Construction Dive, data from Dodge Data & Analytics
Western leaders and laggards
California led the western region with over $86.32 billion in total housing starts in 2021, a 17% increase from 2020.
But for the first four months of 2022, non-residential construction activity in the Los Angeles area and San Diego area decreased by 41% and 37% respectively.
At the same time, non-residential activity in the Las Vegas area increased by 125% in the first four months of 2022 Fontainebleau Resort and Casino Project on the Strip (pictured above) is the 10th largest project in the western region as of October 2021.
Arizona ranked second in the western region with housing starts worth nearly $32 billion, up 29% year over year.
At the low end of the western region, total housing starts in Hawaii hit $4 billion in 2021, down 11% year over year. That’s because of the state’s presence as a tourism hub, which has been hit hard by the pandemic, Reaves said.
Dodge forecasts Wyoming’s state GDP to grow about 4.6% this year, most strongly in the western region. This is mainly due to the war in Ukraine, which should benefit energy-producing states such as Wyoming.
Western Region Government GDP Growth
| Federal State | 2017 | 2018 | 2019 | 2020 | 2021 | *2022 projection |
|---|---|---|---|---|---|---|
| Wyoming | -2.0% | 1.5% | 1.7% | -6.1% | 1.1% | 4.6% |
| Arizona | 3.8% | 3.7% | 3.3% | -1.0% | 5.3% | 4.2% |
| Oregon | 3.9% | 4.6% | 2.0% | -3.0% | 5.4% | 4.1% |
| Utah | 4.3% | 5.8% | 4.8% | 0.1% | 6.7% | 4.0% |
| Colorado | 3.5% | 3.8% | 4.2% | -3.0% | 5.8% | 3.9% |
| California | 4.7% | 4.0% | 3.6% | -2.8% | 7.8% | 3.8% |
| New Mexico | -0.1% | 2.2% | 4.3% | -2.3% | 2.5% | 3.8% |
| Washington | 5.4% | 6.8% | 3.9% | -0.6% | 6.7% | 3.5% |
| Hawaii | 2.1% | 1.2% | -0.9% | -10.8% | 4.6% | 3.4% |
| Nevada | 4.0% | 3.4% | 4.1% | -7.4% | 7.1% | 3.4% |
| Idaho | 2.3% | 6.1% | 4.0% | -0.3% | 5.8% | 3.1% |
| Alaska | -0.2% | -1.6% | 0.2% | -6.0% | 0.3% | 3.0% |
| Montana | 3.3% | 1.5% | 0.4% | -1.3% | 6.7% | 2.5% |
SOURCE: Dodge Data & Analytics
