California Forecast: Construction Expected to Top $65.4 Billion

By Paul Napolitano

Attendees at last month's Outlook 2005/Best of California Awards at the Westin Pasadena included a contingent from San Diego-based Barnhart Inc., winner of three awards, foreground (photo by Lee Manning).

A frenzy of single-family housing construction in inland California continued to drive residential construction in 2004. And a robust rise in the construction of income properties is expected to make headlines in California this year, Robert Murray, vice president of economic affairs at McGraw-Hill Construction, said last month during an economic conference in Pasadena.

Murray predicts total construction in California this year to surpass the total from 2003 by 1 percent--$65.450 billion to $65.060 billion.

Residential construction for the first nine months of 2004 was 15 percent ahead of total for the first nine months of 2003. Meanwhile, nonresidential construction was down 1 percent, non-building construction was up 16 percent, and total construction was up 15 percent.

A number of economic indicators should drive growth in California this year. Employment is expected to grow 2 percent, the state's manufacturing sector is improving and hiring is picking up in the technology, telecom and aerospace industries. Murray said the passage of a number of bond measures in recent years continues to support school construction, despite tight fiscal conditions.

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