Building permit & new building contract data for Houston

2008 figures revised upward

Wendy Natt, Jun 23, 09.

Data from the city’s building permits department show that permits for building construction issued by the City of Houston in May were down about 23 percent from May 2008, and year-to-date totals were 38 percent lower in the first five months of 2009 than in 2008, according to a recent Houston Economic Indicators email update from Skip Kasdorf at the Greater Houston Partnership (GHP).

So far this year, the value of permitted construction is $1.64 billion.

Residential permits for new construction slipped 55 percent this year, and nonresidential is down 63 percent. Nonresidential additions, alterations and conversions fell only slightly, by about 2 percent, while residential additions, alterations and conversions have declined 26 percent.

GHP attributes this “steep” decline in new construction activity to the very tight credit markets affecting Houston as well as the rest of the country.

The value of new building contracts in the 10-county Houston metro area are also well below last year’s totals at this time: between January and May 2009, new contracts are valued at half of what they were for the same period last year. GHP obtained these figures from preliminary data provided by McGraw Hill Construction.

New residential construction contracts have fallen 46 percent (to $1.8 billion), while nonresidential contracts are down 55 percent (to $1.5 billion).

GHP emphasizes that these preliminary estimates often paint a worse scenario than what is actually happening, and that revisions, published a year later, can be substantial. So, as May 2009 data was being released, the May 2008 data were revised upward by around 50 percent.

It’s more important at this point to look at what was happening last year, now that more accurate numbers are available, says GHP:

In May ’08, nonresidential construction was still healthy, rising at an annual pace exceeding 20 percent. Residential construction, on the other hand, already had declined at more than 20 percent over the past year.

View the full list of the Greater Houston Partnership’s Houston Economic Indicators for June 23, 2009.

(Photo credit: Dean Terry)