2014 will not go down as a banner year for construction in Western PA but the overall economic picture turned markedly brighter, particularly in the fourth quarter. The improving picture showed up strongest in the job creation and gross domestic product news. Early forecasts about the economy for 2015 lean towards continued improvement in employment and consumer conditions, along with GDP that is steady above 3% for 2015.

 

The data on 2014 suggests the year wasn't as bad as it may have felt, especially since the fourth quarter showed significant improvement. The total non-residential contracting for 2014 in the seven-county Pittsburgh metropolitan area was $2.77 billion, a slight decline of $50 million or 2.8% from 2013. Contracting in the fourth quarter was $850 million, an unusually high volume. The carry over effect of late-year bidding and green-lighting of deferred projects has already been felt in 2015, with $270 million contracted or started since Jan. 1. The most recent period of similar activity was the fourth quarter of 2004, when construction emerged from the previous downturn.

 

Housing activity was off more significantly in 2014, although the decline was primarily a reflection of the boom in apartments in 2013. Single-family detached starts were off by 8.9% at 1,971 units, while multi-family and attached units declined 24.4%. The total of 2,902 units of multi-family was the most since 1995, however, except for the 3,838 units started in 2013. As the year ended, some 3,500 units remained in the apartment pipeline. 

 

One interesting stat for 2014 was the decline in the overall input price of construction compared to 2013 (-.9% vs +1.3%). The AGC's Ken Simonson's analysis of the pricing showed that the steep decline in diesel fuel (-26%) made all the difference as most other materials increased, except for copper (-4.5%). A survey of the supply chain showed most materials going up again in 2015 - or at least trying.

Project News 

 Bidding at the start of the year has been typically sluggish for early January, although there is some encouragement that the public construction market is mending. The $38 million Forest Hills High School is re-bidding on Feb. 12 and the new $15 million Brownsville Elementary School on Feb. 16. Penn State is taking bids on a $25 million water treatment plan on Feb. 26. See more details at the PBX website. The Dept. of General Services has issued more projects for A/E services in recent months, including two State Police projects in Greensburg totaling nearly $40 million. In West Virginia, Fairmont State is taking bids on $25 million student apartments on Feb. 19 and the $11 million WVU Law Library renovation is due Feb. 12. Bids will be taken from Landau, March-Westin, Mascaro, Massaro, PJ Dick and Rycon. 

Action in the private sector has been more about projects with contracting teams in place getting underway than new bid opportunities. The $10 million UPMC Victoria Garage project bids Feb. 19 to Burchick, Mascaro, Massaro, Mosites and Turner. While no further word is forthcoming on Shell's commitment to the ethane cracker, Jacobs is taking bids on more packages on preparatory work at the site. 

More information about the market is available at BuildingPittsburgh.
 

MBA exec Jack Ramage, Bill Flanagan from the Allegheny Conference and MBA president Dean Mosites enjoying the MBA Annual Membership meeting Jan. 16

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