Engineering Inc. - November/December 2008 - (Page 8)

maRkEt watCh Education Facility Construction Keeps Pace With Surging Demand wise man once said that demographics is destiny. With that reasoning, it should not come as a surprise that construction of education facilities has gained mightily in the past few years—more kids equals a need for more schools on all levels. Economy.com predicts that education construction will trend up one percentage point, compared to a 2.9-percent decrease in total nonresidential construction. Reed Construction data forecasts a 2009 uptick in education construction of 4.4 percent, compared to 4.3 percent in total nonresidential construction. These June estimates are subject to revision, of course, as the economy has stumbled seriously in recent months. There are several points to keep in mind regarding school construction: n Local markets need new schools as houses are built and families grow. A “younger” area typically needs more schools than one with older residents. n Schools are concentrated. According to American School & University, there are 14,000 school districts in the United States, but the top 100 accounted for more than 20 percent of the nation’s public school enrollment in 2004–2005. These 100 districts together equaled the enrollment of nearly 13,000 smaller school systems. n College and university construction projects are undertaken as alumni 8 ENGINEERING INC. By Joe Salimando A provide funding and foundation investments grow. Assuming a stagnant-toworse economy in 2009, it’s likely that construction planning by private institutions in higher education will slow down. n Green issues are “hot” everywhere, but perhaps nowhere to the extent they are in education construction. (See Multi-Project Feature, page 24.) At midyear, when McGrawHill Construction revised its construction market estimates, it lowered its estimate for the 2008 gain in new contracts for education construction from 7 Table 1 percent to 2 percent. But the glass is still half full: That’s a 2 percent gain! A Growth Market Table 1 shows that our nation is enamored with new construction and renovations of buildings where children learn. Some interesting facts you might not immediately notice: n Despite declines in total nonresidential construction—with 2003 significantly below 2000, and with 2010 projected to be about where we were in 2007—education construction seems never to decline. n Education increased as a Education and Nonresidential Construction (in millions of dollars) YEaR total EDuCatIoN CoNstRuCtIoN total NoNREsIDENtIal buIlDING 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Est. 2009 Forecast 2010 Forecast 2011 Forecast 2012 Forecast $46,421 $52,456 $58,848 $64,960 $73,862 $74,316 $74,250 $79,687 $85,992 $98,441 $102,379 $104,427 $109,648 $119,516 $130,273 $296,427 $315,041 $341,503 $346,739 $319,325 $308,649 $324,544 $347,245 $390,632 $457,267 $465,659 $442,441 $465,097 $499,287 $536,109 percentage of the overall nonresidential construction market from 15.7 percent in 1998 to 17.2 percent in 2000; FMI estimates it will reach 22 percent in 2008 and more than 24 percent in 2012. n From 2007 to 2012, total nonresidential construction will grow by 17.3 percent in unadjusted-for-inflation dollars. In that period, education construction will grow by 32.3 percent. Much of the school construction dollar is going to additions and modifications to existing school buildings, according to American School & University. In its mid-May 2008 Construction Report, the magazine estimated (using reader survey responses) that one-third of 2007’s school construction dollars, including colleges and local school districts, went to additions and modifications to existing structures. Thirty-six percent of the K–12 school districts that responded said they completed some form of school construction project in 2007, and 52 percent of respondents said they planned to complete a construction project by 2010. On the college/university front, 61 percent of respondents completed a project in 2007 and 73 percent planned to finish at least one project by 2010. Joe Salimando writes frequently on the construction industry at www.eleblog.com. He can be reached at ecdotcom@ gmail.com. Source: FMI Corp. Q2 2008 Construction Outlook NovEmbER / DECEmbER 2008 http://www.Economy.com http://www.eleblog.com

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Engineering Inc. - September/October 2008 Contents From ACEC to You News & Notes Market Watch Legislative Action Engineering Goes Back to School Winning the Talent War Mastering A Hard-Luck Economy Education Makes the Grade in Green Construction 2008 Young Professionals of the Year 2008 Fall Conference Highlights Technology Members in the News One On One

Engineering Inc. - November/December 2008

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