Commerical Building Is Strong in Madison, Wisc.'s Suburbs

Approximately $500M of non-residential starts in Madison and Dane Co.


Construction material prices steady after Katrina

A year ago, there were fears that rebuilding after the devastation left by Hurricanes Katrina and Rita would lead to shortages in construction materials and sky-high prices.

That didn't come to pass, said Tom Thayer, president and chief executive officer of Tri-North Builders in Madison. Initially, prices for some materials spiked, but they later leveled off, he said.

"The actual reconstruction is taking a lot longer than had been anticipated, so material usage is being spread out over a longer period of time," Thayer said. Part of the problem is: "They just can't get as much manpower to rebuild as fast as they'd like to."

Materials such as cement, iron ore and wood still cost more, though, mainly because of China's rapid industrial growth, Thayer said.

Nationwide, the number of jobs in the construction industry has been stable for the past five months, according to the U.S. Bureau of Labor Statistics.

While home building is down, commercial construction and specialty trades added nearly 16,000 employees in July, on a seasonally adjusted basis.

Hospitals, manufacturing, energy and travel industries are adding buildings "at a high rate that should sustain further growth in construction jobs," said Ken Simonson, chief economist for the Associated General Contractors of America.

--Judy Newman

Office construction takes a break

Cubicle construction is on a coffee break -- a long, triple-cappuccino of a break.

The number of commercial office buildings that took shape in Madison during the past 12 months dropped sharply from the previous year. Office starts totaled $57 million, less than half of the $122 million worth of projects initiated over the previous 12-month period.

"I think we are seeing a slowdown in speculative office construction, mostly due to a lot of big buildings being put up (the year before) and filling those up," said Chris Richards, research analyst with Oakbrook Commercial Real Estate in Madison.

Major retail construction starts also dipped in Madison during the past year to a total of $13 million from nearly $19 million the previous year.

Monona's retail construction was nearly as high as Madison's, and just from one project: A $12 million Wal-Mart.

Huge stores could boost suburban building totals again next year, with plans for a Target store along McKee Road in Fitchburg and a controversial proposal for a Wal-Mart supercenter in Stoughton.

Tom Thayer, president and chief executive officer of Tri-North Builders, said projections show retail construction will remain high next year.

"The construction industry is strong here and it's strong nationwide," he said. "I think 2007 will be equally strong."

-- Judy Newman

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