NWA construction sector stays hot

by The City Wire staff ([email protected]) 79 views 

Temperatures weren’t the only thing hot in July. The local construction sector reports a strong month of building with new residential and commercial permit values rising 27.86% from a year ago in the region’s four largest cities.

Fayetteville, Rogers, Springdale and Bentonville issued new construction permits totaling $42.523 million in July compared to $33.256 million in the same month of 2012. This report looks at new construction and does not include, additions or renovations. Roughly 80% of the total construction activity was in single family housing, a market that is working overtime to keep up with demand amid record low inventory levels and a shortage in skilled workers, according to industry insiders.

Builders started on 151 new homes in July among the four cities in this report. Total new permit values equaled $34 million, up 14.35% from $29.737 recorded in the year-ago period, according to the respective cities.

New Home Permit Values (July)
Bentonville $10.552 million, up 3.97%
Fayetteville $10.381 million, up 31.93%
Rogers $8.773 million, up 16.82%
Springdale $3.8 million, down 7.67%

“Home building is great catalyst for the economy and we are hearing that local builders are busy, some are having push the calendars back a few weeks because they there is more demand and a shortage of skilled workers,” said Brent Hanby co-owner and chief operating officer for Encore Flooring and Building Products in Springdale.

Brenda Jones, director for the Northwest Arkansas Home Builders Association, said local builders and remodelers are having a hard time finding quality framers, electricians, plumbers and other skilled labor.

“We added a ‘Help Wanted’ listing to our newsletter and there are constantly postings from companies seeking skilled subcontractors who want to work. I have had a few builders tell me they have all the work they can handle at this time. We also had five or six builders who planned to put new their homes in our June Parade of Homes but they sold them quicker than expected,” Jones said.

Arkansas is part of a national trend as new home inventories remain at a 10-year low. At the same time, new home sales across Benton and Washington counties have been strong, up 16% this year over last, according to Paul Bynum of MountData Inc.

Single family home starts rose to 591,000 across the U.S. in July, up from 512,000 a year ago.
 The year-over-year rise in single-family home construction contributes approximately 500,000 jobs to the U.S. economy, according Regional Economic Models Inc., a data analysis firm.
 REMI said the net gain in construction jobs totaled nearly 2 million new positions added from July 2012 to July 2013.

Locally, construction jobs rose to 8,800 in July, up from 8,300 year ago. The construction sector employment peaked at 12,700 in July 2006 ahead of the market bust, according to the Bureau of Labor Statistics.

Hanby said demand has picked up in the local area at the same time new home inventories are low, the complete opposite of what happened in late 2006 when the residential market crashed.
 This time housing is helping to lead the national economic recovery not making it worse, Hanby added.

“Construction of new homes is a major driver of our economy at the national and state levels,” said Dr. Frederick Treyz, CEO and chief economist of REMI. “We estimate that for every new house constructed, between four and five new jobs on average are created.”

Jones said the local home construction business is strong today, but when there is ample demand and a shortage of skilled labor the risk of handyman imposters also rises.

“We have been getting more calls from consumers who said they have paid for work as long as six weeks ago which was never completed. Consumers need to check out the contractors before they hire them and certainly before they pay them. We provide a free service to the local public who want to check references on a contractor or handyman,” Jones said. 


The four cities in this report also issued a few permits for new commercial projects during July. Those permits totaled $8.523 million, compared to $3.556 million in the same month of 2012.

Fayetteville issued three permits totaling $4.829 million, the largest of those is the new Hilton Garden Inn under construction at 1325 N. Shiloh Drive, near the Wedington exit on Interstate 540. That project is 115 rooms with a valuation of $4.009 million.  

The city also issued a permit for Sycamore Row Homes who is building a mixed-use facility at 360 W. 5th Street. These units will be retail on the ground floor with residential housing above. That permit was valued at $683,591. The other permit was for a communication tower along Zion Road.

In Bentonville, there was one new commercial permit for Bright Ridge Dental at 1603 Southwest Regional Airport Blvd. That permit was valued at $347,157.

In Springdale, Hunt Ventures got a permit to build a new medical clinic at 2158 Butterfield Coach Road. This permit was valued $2.012 million.

Rogers issued four new commercial permits valued at $1.264 million. These permits were for an office finish-out for Perkowitz + Rush Architects and three projects for Elder Construction for senior living units.