California Construction Volume Surpasses 10 Year Forecast Totals.

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SAN FRANCISCO--(BUSINESS WIRE)--Nov. 3, 1999--

Economic expansion in California's total construction volume after nine months of 1999 is approaching the largest sector forecasts have seen in the state over the past 10 years.

According to residential and nonresidential data compiled monthly by the Construction Industry Research Board (CIRB) and run through analysis by Lamberson Koster & Company, surety and insurance brokers, along with nonbuilding activity figures accumulated by F. W. Dodge of the McGraw-Hill Companies, California's construction activity totals $37.9 billion for the first nine months of 1999, up 12.8 percent from the same period last year. CIRB is forecasting the state's total construction activity, which includes residential and nonresidential (building construction) and nonbuilding (highway-heavy) construction and public buildings, to bring in $52.76 billion in 1999. This will be an 8.5 percent increase over comparable construction activity in 1998 and will be the highest forecast total since 1990's $48.92 billion. In addition, the $52.78 billion total reflects almost a 50 percent increase from the recession low of 1993, which was $35.26 billion.

Ben Bartolotto, Director of the Research Board which will be celebrating its 25th anniversary next month, says overall construction activity is a "mirror of the general economy." The CIRB analyst says "the forecasts reflect the current trends in economic growth in California."

For specifics, Bartolotto points out:

- Total building construction (residential and nonresidential) currently totals $31.6 billion for the first nine months, up 13.8 percent from the corresponding period last year. CIRB is forecasting this sector at $40.4 billion in 1999, up 9.4 percent from 1998.

- Nonresidential (commercial) building totals $12.1 billion in the first nine months of 1999, up 6.1 percent from1998. CIRB is forecasting nonresidential activity to reach $15.4 billion in 1999, up 3.1 percent from 1998 and $15.7 billion in 2000, up 1.8 percent from 1999. The 1999 and 2000 forecast totals are the largest in this sector since 1989's $16.6 billion, adjusted for inflation.

- The year-to-date nonbuilding (highway-heavy) construction totals $6.2 billion, up 8.4 percent from 1998. CIRB is forecasting nonbuilding activity to total $7.8 billion in 1999, up 2.6 percent from 1998.

Although total construction activity for the month of September was down 5.7 percent from August, totaling $4.2 billion, the nonbuilding sector, more specifically public works construction, continues to make large inroads. Since July, nonbuilding activity has increased $2.8 billion over the past three months. September's total of $869.7 million includes a $147 million Caltrans seismic retrofit of the Bay Bridge in San Francisco. Nonbuilding projects in August included two large harbor projects and several large highway projects.

Also in September, permits for private nonresidential building totaled $1.3 billion, up 2.5 percent from August 1999. September's large projects include a $16.9 million store and a $20.0 million renovation of an elderly care facility, both in Alameda County in the Bay Area. In Southern California, Los Angeles had a $40.7 million parking garage for an entertainment center and a $25.0 million mall rebuild. And, in Orange County, $64.5 million in three Irvine office projects and a $30.0 million Garden Grove hotel.

Lamberson Koster analysts point out that along with construction activity, employment averages 667,500 in September, up 5,100 from August and up 53,200 from September 1998. Forecasts show employment will average 653,000 in 1999, up 8.5 percent from 1998 and up a whopping 46.5 percent or 207,300 more employed than the 1993 recession low of 445,700.