2008 Construction Market Should Be Similar To 2007's

By Mike Larson, Editor | September 28, 2010

Overall, construction work in Wisconsin should be up a bit in 2008.

Reed Construction Data (RCD), publisher of Western Builder, projects the total value of construction in the state to reach $5.4 billion, up 10.3 percent from $4.9 billion in 2007.

RCD expects transportation work to reach $630 million, up 4.1 percent from $605 million in 2007.

Sewer and water work, conversely, is expected to drop by $15 million in 2008 ($320 million vs. $335 million in 2007).

"Miscellaneous civil" construction is expected to drop by $20 million, from $435 million in 2007 to $415 in 2008.

The "total highway and heavy" category will remain virtually the same in 2008 as it was in 2007. The estimate for 2008 is $1.37 billion, down less than 1 percent from 2007's $1.38 billion.

Building construction is expected to rise by 14.6 percent in 2008, reaching $4.01 billion, compared to $3.5 billion in 2007. This category includes all buildings except single-family homes.

A look around the state seems to generally confirm the projections.

State road construction should improve about 4.5 percent, thanks to higher funding in the new 2007–2009 state budget and to federal funds that have been carried over from 2007 because they came too late to be used this year.

The new state budget provides $744 million to $764 million for WisDOT construction in 2008, compared to the estimated $678 million to $698 million budgeted for 2007.

Wisconsin Department of Transportation (WisDOT) 2008 quantity estimates are generally similar to 2007. Concrete is expected to be up, reaching 2.3 million square yards (compared to 1.4 last year). Excavating is also expected to rise, reaching 16.3 million cubic yards (vs. 13.6 million). Estimated base course usage will be 5.1 million tons (up slightly from 4.9).

Although estimated asphalt usage is 2.9 million tons, down from 3.4 million tons in 2007, it is likely that actual usage will end up being about equal to 2007's.

Milling is estimated at 7.4 million square yards (down slightly from 7.7 million). And striping is expected to be 23.8 million linear feet (down significantly from 36.7 million in 2007).

Some of the major highway projects that will start or continue in 2008 include: completion of the new Highway 57 in Door County, continued work on Highway 51/39 near Wausau, continued work on the Marquette interchange, continued work on Highway 41 in Oconto County, and the $100-million Burlington bypass.

Building construction should also improve. Although housing starts are down, commercial construction continues to be strong, with no letup in sight.

Overall demand for commercial, health care and industrial space continues to be strong, led by commercial office expansions, multi-unit housing, casino construction and additions, food-processing plants, bio-diesel facilities, clinics, hospitals, and extended-care facilities, as well as colleges and universities.

A few of the projects in this category are the Capitol West and University Square projects in Madison, the Pabst Farms project west of Milwaukee, a new four-story multipurpose building at Lawrence University in Appleton, Manitowoc Crane Group's expansions in Manitowoc and Port Washington, Gehl's new headquarters in West Bend, the addition to the Potawatomi Bingo Casino in Milwaukee, casinos in northern Wisconsin, the Monroe Clinic, the new Aurora hospital near Oconomowoc, the new Time Warner building in Appleton, and numerous buildings for University of Wisconsin campuses.

Among infrastructure projects, water and sewer activity looks as though it may continue to be a bit slow again in 2008 because of the slowdown in housing starts, but power generation and transmission should remain active, with major projects continuing at traditional power plants, as well as construction of new wind-driven generating facilities and transmission lines. A few examples: continued work at We Energies' power plants in Oak Creek, Port Washington and the Menomonee valley, along with three wind farms near Fond du Lac and Horicon that are owned by three different power companies.

The city of Madison reports that it is going to build a $4-million fire station, do about $4 million worth of work on libraries and a $2.6-million upgrade to a police station, as well as a number of other building projects. It will also construct about $36 million of streets, plus the $6-million State Street project, and about $25.5 million in sanitary sewer and stormwater-control projects.

Overall, 2008 looks to be about like 2007, and perhaps a bit better. Work won't reach the high level of a few years ago, but 2008 should be a step in the right direction.

Transportation Sewer/Water Misc. Civil Total Hwy & Heavy Buildings Total
2006 828,473,757 278,878,030 449,015,265 1,556,367,052 3,500,043,215 5,056,410,267
2007 605,000,000 335,000,000 435,000,000 1,375,000,000 3,500,000,000 4,875,000,000
2008 630,000,000 320,000,000 415,000,000 1,365,000,000 4,010,000,000 5,375,000,000