California Construction Volume Declines in July.

Business Editors

BURBANK, Calif.--(BUSINESS WIRE)--Sept. 3, 2002

California's statewide construction volume for July is $5.61 billion, down 3.1 percent from June but up 19.0 percent from July 2001.

According to statistical data compiled by the Construction Industry Research Board (CIRB), all construction sectors show double digit percentage increases from July 2001 with the exception of private nonresidential building, which was down less than five percent at 4.6 percent. Residential building, however, was the only sector in the month of July to show an increase, 5.4 percent from June 2002.

Ben Bartolotto, Director of CIRB, attributes the year to date total state construction volume increase of 19.0 percent to a combination of factors: the rebounding of residential construction, heavy construction holding its own with several large projects and government building construction maintaining strength in July, thanks specifically to a $113.9 million State prison expansion project in Delano, as well as a $25.7 million state transportation management center in Los Angeles County, a $38.7 million UC building in Riverside County, a $48.2 million airport parking garage in Sacramento, and a $27.9 million UC building in Yolo County.

Residential building, measured by new units in building permits issued, is at an annual rate of 163,100 units in July, up 17.1 percent from June, and up 24.6 percent from July 2001. CIRB Director Bartolotto notes that in the first seven months of 2002, California's new housing units total accounts for only 9.1 percent of the national total. California ranks third behind Florida and Texas.

California's public works construction, which includes government buildings plus heavy construction, continues to be the state's bell weather sector, although July's numbers were down. Public works volume in July total $1.54 billion, down 7.2 percent from June but up 31.1 percent from July 2001. Once again large projects dominated and inflated the figures. Among the heavy construction projects in July were $49.5 million freeway alteration in Fresno County, $39.1 million water treatment project and a $25.3 million freeway structure, both in Santa Clara County; a $35.2 million wastewater treatment plant expansion in San Mateo County, and a $45.0 million power plant in Solano County.

In the first seven months of 2002, public works construction totals $10.1 billion, down $375.3 million or 3.6 percent, from the same period in 2001.

CIRB is forecasting public works construction at $14.76 billion for this year, down 7.6 percent from 2001, which was the last of six straight years of steady increases. Director Bartolotto says most of the forecast decline is due to a reduction in power plant starts in 2002 but fiscal constraints are also playing a role in reducing public works contract volume.