Equipment Type

2007 Construction Forecast

In the coming year, Midwest Contractor expects the total highway and heavy construction volume in Iowa, Kansas, Missouri, and Nebraska to increase about 6 percent over 2006 levels. Building and civil construction in the four states will be up about 4 percent in 2007 and transportation will be up about 11 percent.

January 08, 2007

In the coming year, Midwest Contractor expects the total highway and heavy construction volume in Iowa, Kansas, Missouri, and Nebraska to increase about 6 percent over 2006 levels.

Building and civil construction in the four states will be up about 4 percent in 2007 and transportation will be up about 11 percent.

Heavy Construction

Over the past few years, a boom in building and civil construction has been fueled by projects that may be best lumped into a "leisure" category that includes entertainment, recreation, sports, and destination venues. Just two years ago, building construction in the area was at about $10 billion area-wide before jumping to $12 billion last year.

From convention centers and arenas to vacation destinations, casinos and shopping centers, area owners and developers have been investing in leisure at an unprecedented pace. Add to that aggressive revitalization programs under way in many of the area's largest cities that include coordinated public and private investment, and the outlook for building construction remains good for 2007 and the foreseeable future.

In addition to leisure, the Midwest's hot building categories for the year ahead include: health care, energy, education, government, and churches.

Among the area's largest and most intriguing projects in 2007, work continues on the $905-million Holcim (U.S.) Inc. Ste. Genevieve Cement Plant south of St. Louis.

Bloomsdale Excavating completed its year-long site preparation and harbor excavation for the project last month and Holcim in November selected Washington Group Alberici (WGA) to build the plant.

WGA is a majority-owned joint venture formed between Washington Group International of Idaho and St. Louis-based Alberici Constructors, Inc. The joint venture will be the construction manager/general contractor and provide procurement services for equipment and construction materials.

When completed in 2009, the Ste. Genevieve plant will be the world's largest single kiln line cement plant with an annual production capacity of 4 million metric tons.

At the peak of construction, the project will employ approximately 1,200 skilled construction workers.

Work could begin as soon as this spring in Kansas City, Kan., on a project that could mean up to $1 billion in development.

Schlitterbahn Waterparks recently expanded its plans for a park in Wyandotte County. In addition to a waterpark, the proposed development includes 1,800 lodging units, 400,000 square feet of retail space and a manmade river walk.

Work is set to begin this year near Pella, Iowa, on the $155-million Earthpark, previously known as the Iowa Rain Forest project.

The project includes a 4-acre indoor rainforest, a 600,000-gallon aquarium, environmental galleries, and exterior wetland and prairie exhibits. It will be built along Lake Red Rock with completion scheduled by 2010.

Though a much smaller project dollar wise, the new Missouri River Pedestrian Bridge between Omaha and Council Bluffs is one of the area's highest-profile projects. Construction will begin this spring on the $22-million bridge designed by HNTB of Kansas City and constructed by APAC-Kansas Inc.

Highway Construction

There is reason for area roadbuilders to be optimistic about 2007 as well, particularly in Missouri and Kansas.

Coming off the year-ahead-of-schedule completion of its Smooth Roads Initiative which by the end of 2006 brought 2,200 miles of the state's most-heavily traveled roadways into good condition, the Missouri Department of Transportation (MoDOT) last fall announced a plan to repair more than 800 bridges in the next five years. With the Safe and Sound Bridge Improvement Plan, MoDOT plans to award a design-build contract to a single contractor team by May to bring 802 bridges in "serious" or "poor" condition up to "satisfactory" condition. In addition to making needed repairs, the winning contractor team will also have to maintain the bridges in satisfactory condition for 25 years. MoDOT estimates the program will cost $400 million to $600 million over the five years and it plans to use its existing federal bridge replacement funds to pay for the program.

MoDOT's overall construction and maintenance spending for 2007 will total nearly $2 billion, up 12 percent from $1.78 billion in 2006.

In Kansas, the Kansas Department of Transportation is entering the last three years of its Comprehensive Transportation Program with $1.2 billion in projects remaining, along with more than $550 million in maintenance. In FY 2007, KDOT will spend about $688.6 million with the bulk of that investment, $373 million, going toward major modifications. The department also plans to invest about $184 million for substantial maintenance, $83 million in system enhancement projects and $48 million on priority bridges.

Overall, KDOT's total construction and maintenance spending in 2007 will be 32-percent higher than the $520 million in 2006.

The Iowa Department of Transportation (IDOT) let contracts for construction and maintenance totaling about $678 million in FY 2006 and expects spending for FY 2007 to remain level. IDOT's priorities for 2007 include completing the reconstruction of Interstate 235 through Des Moines and finishing the Iowa 60 corridor in northwest Iowa.

The Nebraska Department of Roads (NDOR) Surface Transportation Program for FY 2007 totals $609 million, down slightly from FY 2006. The program includes planned expenditures of $181 million for state highways, $137 million for primary highways, $80 million for interstates, $64 million for expressways, $27 million for the urban federal-aid system, and $18 million for bridges.

Caveats

Yes, we believe 2007 will be another good year for area contractors but, as always, there are caveats.

The costs of construction materials and fuel will continue to be a factor in bidding. The cost of equipment will also be up in 2007 though it is refreshing that many manufacturers and equipment providers announced planned price increases months ago to give contractors an opportunity to beat the increase or at least plan for it.

Contractors in the Midwest and across the nation will also continue to be challenged to find and retain a skilled workforce, and to keep up with the increasing costs of benefits, particularly health care.

2006 2007
Transportation $3.6 billion $4 billion
Buildings and Civil $12 billion $12.5 billion
Total $15.6 billion $16.5 billion

 
 

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