California construction showing signs of coming to life

Business Wire, Sept 8, 1995

SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Sept. 8, 1995--California construction volume for July totaled $2.63 billion while showing signs of coming to life after being down 5% for the first six months from the corresponding period last year.

Seasonally adjusted, the July 1995 contract annual total is $31.2 billion, down 0.9% from June, but up 5% from July 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, July's total, measured by building permits and contract awards, is "looking better" and is proving strong enough to not force economists to change the annual forecast as has been necessary over past months.

"Historically July figures in residential activity are down," said CIRB Director Ben Bartolotto. "But stated as an annual rate, the July housing total shows 91,200 units, up 22.1% from June, and up 11.6% from July 1994."

Bartolotto also noted that private nonresidential building totaled $739.4 million in July. Adjusted for seasonality, this is an annual rate of $8.27 billion, up 5.6% from June's $7.83 billion rate, and up 3.8% from July 1994's $7.97 billion rate.

Large projects in July include a $44.6 million shopping mall in Ontario (San Bernardino County) and a $38.2 million office building and a $29 million industrial project, both in San Jose (Santa Clara County).

The Lamberson Koster analysts point out in the first seven months private nonresidential building totals $4.72 billion, up $284.2 million from a year ago. Most of this increase is in alterations and additions.

Heavy construction contracts was the only category to post a decline in July with contracts totaling $691.3 million. The July total is down 50.5% from June's $1.41 billion, but up 4.8% from July 1994's $667.4 million. The large drop from June was attributed to a $712 million toll road in Orange County. Adjusted for seasonality, the July total is an annual rate of $8.44 billion, down 25.3% from June, but up 1.4% from July 1994.

Bartolotto said, heavy construction forecasts remain unchanged with $7.23 billion in 1995, down 3.9% from 1994, and $5.91 billion in 1996, down 18.3% from 1995. Chief reasons for the projected decline in 1996 is the completion of earthquake emergency work and the fact that there is less highway work projected in the near future due to the lack of funding. -0-

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

CONTACT: Willow Communications

Tom Willow, 916/974-7556