California’s Best Markets for 2012 (Excerpt)

Where the Work Will Be in 2012
(From the AEC Insight E-Mail Newsletter, September 13, 2011)

For most California AEC market sectors and service areas, 2012 will be vastly better than 2011. Not that the bar was set very high, but better is better.

Certain public- and private-sector client segments will recover faster than others, so it is important to know which geographic areas, industries and project types are best positioned for the strongest recovery.

We discovered several promising candidates during the course of our research for The 2011-2012 AEC Market Guide to California, including the following:

The City of Dublin.  If you work in Northern California and you’re not talking with people in the Dublin area, you’re missing an opportunity.

One of the fastest-growing cities in the region is seeking to expand its total area by annexing the neighboring 1,450-acre Doolan Canyon property for development. The city’s commercial climate also appears to be improving, with business leasing activity strong – including an announcement by business software provider Taleo that it is expanding its space and adding 200 employees.

Unemployment is very low (6.6% in June), and housing permit activity year-to-date through June 2011 is more than 100% higher than it was during the peak of the housing boom (average of June YTD permits for 2005-2007). Its strong school system is a draw for families looking for a place to settle. Recently improved business incentives are helping fill retail vacancies that began to plague the city a few years ago. Plans for a new charter high school and expansion of the city’s water infrastructure are in the works.

Even some of the city’s problems – a relatively high foreclosure rate and a potential battle with neighbor Livermore over the Doolan Canyon plan – could spell opportunity for AEC firms. 

Large Infrastructure Projects. While some states are rejecting high-speed rail – and the federal money that comes with it – California continues to move forward with its plans to build the politically charged high-speed rail line. On September 9, the California High Speed Rail Authority drew more than 800 representatives from Central Valley businesses to a forum discussing how small business can grab a piece of the $6 billion that will be spent on construction of about 120 miles of high-speed rail lines from Fresno to Bakersfield.

Even if HSR falters, other large infrastructure projects show promise. On September 12, the California Public Employees’ Retirement System (CALPERS) announced that it was investing an additional $800 million in large infrastructure projects in the state – including airports, roadways, water/wastewater systems and energy. And President Obama’s Jobs Plan, should it (or any version of it) pass, would likely result in at least a short-term boost in the state’s infrastructure funding. Obama’s initial plan calls for $3.96 billion in highway and transit modernization money for the state.

San Bernardino Schools. The Obama Jobs Plan has a lot more to offer California. The White House says that in California, under the American Jobs Act, 710,000 firms will receive a payroll tax cut, while as much as $1.85 billion could go to revitalize local communities, $1.13 billion to community colleges and $2.81 billion for school infrastructure projects.

Some would likely benefit more than others in the Obama plan, including San Bernardino schools. According to the Press-Enterprise, “San Bernardino City Unified School District would be a big winner under President Barack Obama’s job-creation plan. The district, one of 11 in California and 100 around the country singled out for direct funding, would receive more than $60 million for school construction and modernization projects if Congress approves the package as proposed.”

Obama’s proposal faces a political fight and is unlikely to pass in its current form, but the potential for significant amounts of money to pour into a single school system should have the attention of AEC firms working in the K-12 sector.

The other 10 California school systems with money earmarked in Obama’s plan, according to the Press Enterprise, are Los Angeles ($743.5 million), Fresno ($97.5m), San Diego ($91.8m), Long Beach ($75.5m), Sacramento ($46.9m), Oakland ($42.4m), Stockton ($39.0m), Santa Ana ($36.2m), Bakersfield ($34.7m) and San Francisco ($29.8m).

For much more insight into these and the other most promising markets in California, order The 2011-2012 AEC Market Guide to California on the AEC Insight Home Page.

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