CIRB: State Construction Volume is $4.2 Billion in February.

Business Editors

BURBANK, Calif.--(BUSINESS WIRE)--April 5, 2001

California's statewide construction volume in February totaled $4.2 billion, down 35.1 percent from a record January total of $6.4 billion.

According to statistical data gathered by the Construction Industry Research Board (CIRB), all sectors of housing, private nonresidential, and public works were down in February compared to the previous month. Still, the state's total construction volume for the first two months of 2001 totaled $10.6 billion. This is $2.14 billion more in construction than January-February 2000.

"Normally, January and February are slow months," said Ben Bartolotto, Director of the 27-year-old Research Board. "The unusually high January activity was tied to a surge in permit processing where contractors anticipated fee increases and that resulted in the start of many large projects in January. This was followed by a slowdown in February activity. The net outcome, however, shows the total state construction volume is still up 25.3 percent for the first two months of 2001."

"The concentration of large, major projects, primarily in January," says Bartolotto, "overstates and inflates the two-month trend making it difficult to interpret the numbers. Our forecast for total construction volume shows a slight increase to $62.54 billion, or up 0.7 percent over 2000's $62.11 billion."

The CIRB analyst says both commercial-industrial building as well as public works construction, which includes highway-heavy and public works, were depressed in February. Private nonresidential building totaled $1.28 billion, down 22.6 percent from January, but up 8.0 percent from February 2000. In the first two months of 2001, nonresidential building totals $2.94 billion, up $430.1 million, or 17.1 percent, from the same period last year. CIRB says the increase is led by major office projects in both Southern California and the Bay Area where new office building construction totals $685.0 million so far this year.

In February, the state's public works construction totaled $1.008 billion, down 52.8 percent from January but up 36.7 percent from February 2000. With fewer major projects in February, highway-heavy construction volume totaled only $673.1 million. This compares to the previous 60 days when highway-heavy projects combined for $2.613 billion. Bartolotto points out those two-month figures do not reflect the underlying trend. Heavy construction is expected to slow down in the months ahead as the effects of major projects are spread out over the remainder of the year.

In another sector, government-owned building construction activity, which totaled $334.9 million in February, was down 43.3 percent from the previous month's total of $591.1 million. The two major government-owned projects for February are the $24.6 million Navy Housing project in Kings County and a $37.0 million high school in San Bernardino County.

The good news for public works construction -- in spite of the low February figures -- is after two months in 2001, highway-heavy and public works construction totals $3.14 billion, up $749.1 million, or 31.3 percent increase from the same period in 2000. Major power plants contribute to that increase and two additional power plants are expected to be approved in March and April. As these and other major projects are spread over the remainder of the year the CIRB forecast in public works reflects only a 2.1 percent increase, adjusted for inflation. Still, that translates into $15.76 billion in 2001, the largest public works totals in decades.

For more information, call Ben Bartolotto at 818/841-8210.