2007 Construction Market

By Barry Gantenbein, Editor, Western Builder | September 28, 2010

It isn't every year an editor can start an economic forecast off by painting a positive picture for the construction market. This is an industry of ups and downs, and all too often if seems that the frequency and longevity of the ups exceeds that of the downs by a considerable margin. In 2007, building in Wisconsin construction is expected to be up for the second straight year while highway and road construction is expected to decrease in the state in the upcoming year.

Reed Construction Data, publisher of Western Builder, projects building construction totals of $4.3 billion in Wisconsin in 2007, up 19.9 percent from 2006 totals.

Civil/highway/roads totals are expected to dip to $1.5 billion in Wisconsin in 2007, down 18.1 percent from 2006 totals, according to Reed Construction Data.

A look around the state seems to confirm these projections.

The reconstruction of old warehouses and factories to condominiums and the construction of new condominiums are expected to continue to be strong in Milwaukee's Third Ward, as it has the last several years.

High rise condominium construction will continue on Milwaukee's East Side in 2007, and the Milwaukee suburb of St. Francis is another hot spot for building construction.

The building boom in Madison will also continue.

Building construction on the University of Wisconsin — Madison campus remains vibrant.

Construction has started on the $40.5-million addition to Grainger Hall. The 131,416-square-foot addition will house the MBA programs of the UW's School of Business.

Another notable project on campus is the Interdisciplinary Research Complex at the UW Medical School. The $265-million project is part of the University of Wisconsin's HealthStar initiative, a program to construct new health sciences research and education facilities on the west end of campus.

Downtown and business parks along Interstate 90/94 and the beltline are other areas where building construction is particularly strong in Madison.

With the completion of the Highway 12 expansion, Baraboo is in the midst of a building boom.

Improvements to Highway 39 in Wausau have prompted building construction in that rapidly growing area of the state. Construction of the 11-story, $15-million First Wausau Tower is expected to be completed in early 2007, but there are other building projects in the area.

Building construction is also expected to remain strong in the Fox Valley in 2007.

The outlook for the civil/highway/roads market in 2007 isn't as bright as the building sector of the Wisconsin construction industry.

Wisconsin Department of Transportation (WisDOT) officials have announced a projected statewide construction let level in the $678 million to $698 million range for 2007, which is down significantly from the 2006 let level of $1.023 billion.

The projected let level for 2007 includes $670 million to $690 million in the Improvement Program (state highway rehabilitation, local programs and major highway projects), $7 million for maintenance and operations, and $500,000 for the Marquette Interchange reconstruction project in Milwaukee.

The 2006 let level included $663 million in the Improvement Program, $356 million for the Marquette Interchange, and $3.7 million for maintenance and operations.

WisDOT officials cited movement of the Marquette Interchange reconstruction project past the let stage, the state legislature's decision to end gas tax indexing, and the increased cost of construction materials as the major causes for the projected reduction in WisDOT work.

In 2007, WisDOT quantity estimates are down in all categories except for bridge deck, milling and rubblizing.

Particularly hard hit are excavation quantities, dropping to an estimated 11.2 million cubic yards in 2007 from 17.2 million cubic yards in 2006, and concrete quantities, falling to an estimated 1.4 million square yards in 2007 from 2.7 million square yards in 2006.

While let levels are down dramatically for the Marquette Interchange reconstruction, work continues through 2007 on the more than $800-million project.

Other major WisDOT projects in 2007 include: the Burlington Bypass, the Highway 141 expansion in Oconto and Marinette counties, the Highway 10 expansion Marshfield and Stevens Point, and the East Washington Avenue reconstruction in Madison.

However, a number of majors wrapped up in 2006, while other WisDOT projects that were supposed to be let in 2007 have been pushed back to 2008 because of budgetary constraints.

It will be a tough year for highway construction in Wisconsin in 2007.

Misc. Civil Other Civil Highway/Roads Civil Total Building
2003 $737,898,287 $570,608,753 $475,138,837 $1,783,645,877 $3,244,140,452
2004 $220,702,043 $570,465,296 $286,303,495 $1,077,470,834 $2,219,505,545
2005 $228,038,173 $693,080,040 $620,847,060 $1,541,965,273 $2,202,411,871
2006 $580,228,719 $673,575,634 $595,080,999 $1,848,885,352 $3,612,479,333
2007 $416,561,359 $577,707,109 $520,608,267 $1,514,876,735 $4,332,493,544