CIRB: First Quarter California Construction Volume Up.

Business Editors

BURBANK, Calif.--(BUSINESS WIRE)--April 29, 2004

California's statewide construction activity after the first quarter of 2004 totals $16.9 billion, up 6.1 percent from the same period last year.

Credit for the surprising quarterly hike goes to a strong month of March after two so-so months in February and January. According to statistical data gathered monthly by the Construction Industry Research Board (CIRB), state construction volume, both private and public, for March is $6.5 billion, up 24.1 percent or $1.26 billion more than in February and up 18.9 percent from March 2003.

Ben Bartolotto, Director of the Research Board, says several factors contribute to the strong March activity. "For one, there are four more business (working) days than in February", says Bartolotto. "Secondly, private non-residential building totals $1.28 billion, up 34.2 percent from February. And, thirdly, March brings Spring weather and starts the peak construction period.

The CIRB analyst points out in the first three months of 2004, private non-residential building (mainly commercial and industrial) totals $3.19 billion, up 2.7 percent from last year. "This is the first year-to-date increase in this sector since the first half of 2001," Bartolotto says, "indicating nonresidential building may have bottomed out." CIRB is forecasting total nonresidential building to increase by 2.7 percent in 2004 to $14.28 billion. This forecast increase follows three years of substantial decline. In 2000, private nonresidential building totaled $19.9 billion but by 2003 declined to $13.8 billion.

Still another positive indicator that nonresidential building is on the improve is the slight 1.2 percent increase in the San Francisco Bay Region during the first quarter of 2004. In 2003 this region declined by 27.5 percent and accounted for the bulk of the statewide decline in nonresidential building since 2000. The Bay Region also accounted for nearly all of the increase in nonresidential building statewide in 2000. Overall, the increase in nonresidential activity is statewide with fairly large projects in different regions, suggesting this sector is in a turnaround mode.

However, the month of March is the story. California's private building activity, including residential and non-residential construction, totals $5.18 billion, up 30.8 percent from February and up 25.6 percent from March 2003. At the same time, public works construction which includes highway-heavy and public buildings (government-owned buildings) totals $1.33 billion, up 3.7 percent from February. However, while private building activity in the first quarter of 2004 totals $13.16 billion, up 8.1 percent, public works construction year-to-date is down 0.4 percent totaling $3.75 billion.