California construction volume continues upward.

SAN FRANCISCO--(BUSINESS WIRE)--Oct. 6, 1995--The long awaited recovery in construction is rearing its smiling face as California construction volume for August totaled $2.95 billion -- the second highest monthly total for 1995.

The August total, measured by building permits and contract awards, is up 9.4 percent from July and up 10.3 percent from August 1994. Seasonally adjusted, the August total is an annual rate of $32.98 billion, up 2.2 percent from July and up 9.7 percent from August 1994.

According to statistical data compiled by the Construction Industry Research Board (CIRB) and analyzed by Lamberson Koster & Co., surety and insurance brokers in San Francisco, residential building and heavy construction posted gains in August from both the prior and year-to-date months.

"As long as the economy continues to improve we can expect construction to continue to climb, primarily in the residential and nonresidential sectors, right through 1997," said CIRB Director Ben Bartolotto. "It took a long time for us to get where we are after a weak first half of 1995."

Preliminary construction employment figures for September back up Bartolotto's contention, averaging 496,400 workers, up 1,300 from August and up 25,100 for September 1994.

Bartolotto says the gap is slowly closing in residential building which posted an annual rate of 104,000 units in August, up 9.3 percent from July and up 7.3 percent from August 1994. The single-family annual rate is 88,000 units -- "the highest August rate since the 92,900 unit rate of 1990 which was at an early-recession level," said Bartolotto.

According to data from the "Local Construction Potentials" of Dodge Division of McGraw-Hill, heavy construction contracts totaled $713.7 million in August. Seasonally adjusted, this is an annual rate of $8.68 billion, up 3.5 percent from July and up 37.3 percent from August.

The Lamberson Koster analysts report three large heavy contracts in August totaled $264.3 million. They include $121.2 million for Cypress Freeway reconstruction in Oakland, a $120 million cogeneration plant in Sacramento County and a $23.1 million freeway project in Los Angeles County.

In the first eight months, heavy construction tallied $5.57 billion, up 5.5 percent from the same period in 1994. Of this total, $2.60 billion in contracts went to streets, highways and bridges which were up 53.1 percent from the year-ago period. Two projects, the $712 million Orange County toll road and over $400 million in contracts for the Cypress Freeway accounted for close to half that figure.

"If you look at the balance of the heavy construction totals ($2.97 billion) it was down 17.0 percent from the year-ago period," said Bartolotto. Since highway work is tied directly to public works funding, the unanswered question remains, where will the monies come from for the future funding, in the next two years? This issue remains a possible cloud over the highway construction sector.

CIRB has adjusted its 1995 heavy construction forecast to $7.33 billion, down 2.7 percent from 1994. The 1996 forecast is expected to suffer a major drop to $6.00 billion, down 18.1 percent from 1995.

In comparison, the Lamberson Koster analysts report private nonresidential building in the first eight months totaled $5.54 billion, up 6.3 percent (or $329.9 million) from a year ago. Further, the 1995 forecast for nonresidential permit valuations is $8.04 billion, up 1.9 percent from 1994 and $8.68 billion in 1996, up 8.0 percent from 1995. -0-

NOTE TO EDITORS: For further information contact Ben Bartolotto at 818/841-8210.

CONTACT: Willow Communications

Tom Willow, 916/974-7556