Blog Post

By: James Wood

The latest data show strong first quarter results for Utah’s construction sector. The value of construction in Utah in the first quarter of 2016 was $1.87 billion, only two percent below the all-time high of $1.91 billion (inflation adjusted dollars) in 2007 (See Table 1). The full report for the first quarter of 2016 can be viewed here.

Table 1

Permit Authorized Construction in Utah (Million 2016 dollars)

Utah’s nonresidential construction sector is off to a great start in 2016. The value of nonresidential construction in the first quarter of 2016 actually exceeded the value of residential construction; $806.4 million to $801.8 million. This rarely happens.

A closer look at the strong first quarter numbers shows that the nonresidential sector benefitted from the $214 million expansion of the Utah Valley Regional Medical Center and $59 million in new construction for student housing at BYU.  These two projects led to Provo’s record first quarter construction total of $422 million (including residential construction), which far outdistanced construction activity in any other city.

The number of building permits issued for single family units in the first quarter increased by seven percent in 2016. New home construction is concentrated in five cities clustered at the extreme southern end of Salt Lake County and northern end of Utah County—South Jordan, Herriman, Bluffdale, Lehi, and Saratoga Springs (see Table 2).  These five cities account for 25 percent of all single family building permits issued in Utah in the first quarter of 2016.

Table 2

Top Ranked Cities in Residential Construction – First Quarter 2016 (Million dollars)

The number of first quarter multifamily units in Utah increased from 1,000 in 2015 to 1,373 in 2016.  Condominiums had the largest share of multifamily activity with 717 units, up 18 percent over 2015.  New apartment construction was up 67 percent to 661 units.

Below is a summary of Utah’s first quarter, permit authorized construction activity:

• $1.87 billion in total construction value, an increase of seven percent over the first quarter of 2015.
• $806.3 million in nonresidential construction value, up 36 percent over 2015.
• $801.3 million in residential construction value, a decline of nearly eight percent from 2015.
• 3,690 permits issued for dwelling units, up 16 percent over first quarter of 2015.
• 2,297 permits issued for single-family units, an increase of seven percent.
• 1,373 permits issued for multifamily units, an increase of 37 percent.
• $264 million in additions, alterations and repairs, down nearly eight percent from first quarter 2015.

James Wood is the Ivory-Boyer Senior Fellow at the Kem C. Gardner Policy Institute.