University Report  

Jim Haughey, director, Research and Analytics, Reed Construction Data 

Construction spending for higher education work began growing again last summr after a yearlong stall and is now 13% higher than a year ago.  Growth stems almost entirely from classroom space as university administrators struggle to keep up with rapid enrollment growth from part-time and older students.  Spending growth is expected to be near 10% annually during the next few years.  The university market typically expands very late in a business cycle, after tax receipts and investment funding sources have peaked.

Peak spending in the last building cycle occurred in late 2001 and early 2002, more than a year beyond the last recession. State budget reserves, while slipping lower, are still at record-high levels and sufficient to fund further college expansion. A larger share of spending is likely to shift to dormitories and other facilities that were postponed until classroom space was added.