When F.W. Dodge speaks, the architectural, engineering, and construction industries listen. This was evident last week when company representatives presented their U. S. Construction Industry Outlook for 2002 to an attentive group of more than 100 A/E/C professionals in Denver. Mark Shaw, Senior Managing Editor of Colorado Construction Magazine and The Daily Journal delivered a data-intensive overview for all sectors of the residential, non-residential, and non-building construction business.
Projections for various market sectors were mixed, but Shaw was generally optimistic about the length and depth of the current recession on Colorado. He pointed to the negative effect of the national economy on the construction industry, but noted that F.W. Dodge predicts only a one percent drop from 2001 levels in Colorado’s 2002-2003 revenues – pointing out that his company bases its findings on actual contracts, permits issued and work in process. Unless dramatic new developments in the U.S. market occurs, Shaw also sees an economic recovery beginning in 2003. The largest construction revenue increases will be generated by non-building construction, which F.W. Dodge defines as streets, highways, bridges, water supply systems, power plants and sewage disposal systems.
“We see a 4 percent increase in 2002 total non-building construction value, leveling off in 2003,” said Shaw. But non-residential construction (including commercial, government, religious, education, hotels/motel, industrial/manufacturing projects, for example), is estimated to drop off by 4 percent to $3.4 billion in 2002, recovering to almost $3.7 billion in 2003. Residential construction, said Shaw, will remain slightly down, but still dramatically higher than 1998-1999 levels. The current residential construction forecast for 2002 will still top $7.4 billion, dropping to $7.1 billion in 2003. As housing starts have begun to slow anyway, Shaw believes that a healthy market for new homes will continue to drive construction.
The State’s greatest construction slowdown in 2002 will be in the categories such as office/commercial/banking stores and restaurants, hospitals and health care centers, as well as warehouse/industrial (excluding manufacturer-owned projects), according to Shaw. But brighter days are on the horizon in 2003, when retail and industrial construction is estimated to experience a double-digit rebound. A “boom” continues in schools, libraries and labs construction, which since 2000, is