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County's July future construction contracts up 2%

Contracts awarded in July for future construction in San Diego County grew by 2 percent from a year earlier, according to data released recently by McGraw Hill Construction.

In July, San Diego County had a total of $319.732 million in future building contracts, compared to $314.796 in July 2013. Nonresidential building contracts accounted for $266.668 million of the total, while $53.064 million in residential work was awarded.

That split reveals a continuing trend in recent months of growth in nonresidential building with a simultaneous but smaller decline in residential, resulting in net growth in a combined analysis. In July of last year, $84.870 million in nonresidential contracts and $229.926 million in residential contracts were awarded.

In June, McGraw Hill reported a 20 percent increase for the month over 2013 in nonresidential contracts awarded, while the area experienced an 8 percent decline on the residential side. May's numbers showed that contracts awarded during that month were valued at 14.4 times what was awarded in May 2013, and that the value of residential building contracts awarded in the month declined by 45 percent from 2013 to 2014. Both subsets experienced sharp declines in April.

Borre Winckel, CEO of the Building Industry Association of San Diego, said that while the year has shown some volatility in building permits when looking at either nonresidential or residential contracts, 2014 is looking more similar to than different from 2013 as a whole.

"I think the numbers are too small to really read the tea leaves to say we're having a different year this year from last year," Winckel said. "I would say that we're having a very similar year. And it's not good enough of a year."

The number of building permits issued this year is also trending similar to what was seen last year, he added, at about 8,000 total permits issued. The city of San Diego, he said, remains the unquestionable leader in multifamily apartment construction permits, which is no change from a year ago. Two cities Winckel said are trending higher this year than before in multifamily building are Chula Vista and the city of Vista.

"Vista alone accounts for about 21 percent of all the permits issued in the county, because they had a couple of very large apartment projects permitted," Winckel said. "Of course it takes just a building of 100 or 200 units for these numbers to balloon. Now for proper context, the region would do really well economically if it could get back to a 10,000-a-year permit total. It's (been) tough to gain those numbers since 2006."

So far, there have been $2.299 billion in nonresidential and $640.135 million in future construction contracts awarded, through seven months of 2014. This compares to $988.069 million for nonresidential and $1.075 billion for residential, through the first seven months of 2013.

Nonresidential buildings include office, retail, hotel, warehouse, manufacturing, educational, health care, religious, government, recreational and other buildings outside of single family homes and multifamily housing.

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