CIRB: State Construction Expected to Rise Marginally in 2004.

Business Editors

BURBANK, Calif.--(BUSINESS WIRE)--Jan. 5, 2004

California's construction volume for the first eleven months of 2003 is up 6.4 percent from the corresponding period last year, totaling $63.51 billion, but with no thanks to November's monthly volume which dropped 28.9 percent from the previous month.

According to statistical data gathered by the Construction Industry Research Board (CIRB), all construction sectors were down for the month of November except for heavy construction which showed a rare monthly gain. "Normally we see a big drop off for the month of November in all sectors," says Ben Bartolotto, Director of the Research Board. However, two freeway widening projects, one in Contra Costa County and the other in Placer County, totaling $53.3 million, along with a $20.0 million bridge replacement project in Stanislaus County, and a $44.7 million Orange County sanitation district project enabled heavy construction to be up 1.1 percent from the previous month. Bartolotto says, "This movement in heavy construction does not signal any turnaround for the sector."

The CIRB analyst says the so-called bigger picture is better seen in the year-to-date figures. In the first eleven months of 2003, public works construction, which includes public buildings construction (government owned) and heavy (civil works) construction, totals $15.10 billion, down 2.7 percent from the same period last year. Of that figure, public buildings construction totals $8.23 billion to date, up $1.249 billion or a 17.9 percent increase. The bulk of that 2003 increase is due to a $1.528 billion or 53.6 percent increase, year-to-date, in school construction. On the other hand, heavy construction in the first eleven months totals $6.871 billion, down $1.671 billion or a drop of 19.6 percent. "The 17.9 percent increase in public buildings construction could not offset the 19.6 percent decline in heavy construction," says Bartolotto resulting in the almost three percent drop in total public works construction activity year-to-date. CIRB sees a similar scenario playing out in 2004 with public buildings construction forecast at $8.87 billion, up 0.1 percent from 2003 and heavy construction forecast at $6.90 billion, down 6.1 percent from 2003. The heavy construction sector, currently estimated at $7.35 billion with one month to go in 2003, is down $1.86 billion or 20.2 percent from 2002.

Private building construction, which includes residential and nonresidential (commercial) construction, totals $48.41 billion in the first eleven months of 2003, up $4.215 billion or a 9.5 percent increase from the same period in 2002. Bartolotto points out that all of the 2003 increase is in residential building. CIRB is forecasting increases in both residential and private nonresidential building in 2004.

(For further information, call Ben Bartolotto at 818-841-8210).