Consulting-Specifying Engineer - January 2009 - (Page 47) Education construction Education construction spending, adjusted for inflation, grew through the middle of 2008 and will slip slightly for two years. Construction expansion will resume in spring 2010. Education was not directly impacted by the credit freeze because very little short-term financing from the money markets is used in project funding. The recession has a delayed impact on education construction because project managers do not have to consider the availability of paying tenants in their building decisions. The recession will trim the K-12 market more than the university market. Already, K-12 spending has fallen slightly, while university spending continues to expand rapidly. The K-12 market was weaker when the recession hit because enrollment growth has been marginal for several years, while college enrollment has continued to expand much faster. Also, K-12 construction spending relies almost entirely on tax receipts for financing. The purchasing power of income tax receipts began to decline early in 2008. This spread to sales tax receipts late in 2008 and will spread to property tax receipts, largely through delinquent payments, early in 2009. Some states and large cities will experience 10% to 20% falls in the buying power of income tax receipts as taxes on capital gains income plunge. By contrast, university construction budgets rely substantially on student fees, gifts, federal grants, and investment funds. Fees and grants will be more stable than tax receipts. Gifts and investment earnings are already dropping sharply, but fund balances are typically enough to support projects underway or scheduled to start quickly. The K-12 enrollment bulge is now in the 10th grade, so more complex high school buildings will get a larger share of the K-12 construction budget in the next few years. Spending on private school projects will slow and recover first because investment earnings and tuition income react more quickly to changing economic conditions than do property tax receipts. Health care spending Construction spending for hospitals, assisted- “Keltech safety shower heaters will save us $349,000 annually in lowered operating costs.” Jason Desler Health/Safety/Environmental Engineer Read the case study. Learn how Keltech safety shower heaters can meet your specifications for safety and performance. www.keltech.us/casestudy 800-999-4320 WWW.KELTECH.US Input #222 at csemag.com/quickResponse http://www.keltech.us/casestudy http://WWW.KELTECH.US http://WWW.KELTECH.US http://www.csemag.com/quickResponse
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