Public Construction Bump

It seems fitting that in an election cycle where candidates get a post-Convention ‘bump’ in polling approval the public construction market is experiencing a little pre-election ‘bump’ that may help a few contractors deal with a tough year.

The outlook for public construction remains bleak for local, state and federal projects. Revenues at the state level are up but Gov. Corbett and the state legislature will be using any surpluses to pay down past deficits before funding more construction.  This is a game of chicken when it comes to infrastructure, which may or may not have a catastrophic failure or major shutdown before government responds to the failing roads and bridges. It’s not just the state, of course, the federal government is the primary funder for highway construction and the Congress again refused to deal with anything more than a Band-Aid approach, using funds that weren’t adequate in 1995 to fix 2013’s problems.

In the short term, however, the current bid market is marked by a half dozen publicly-funded projects that are in the range of $15-$25 million. The projects include multi-prime projects like the $17.5 milion Clearfield PennDOT Engineering Office, a rebid of the $16 million Lockley Early Learning Center in New Castle and the $24 million Cal University Natili Center.  Mortenson is taking bids on multiple prime packages on Oct. 2-3 for the $18 million Penn State IM Building. The state of WV is re-bidding a single prime contract for the $13 million Buckhannon WV Readiness Center and the $25 million Kiski Wastewater Treatment Plant bids Oct. 17, with only an electical and combined General/mechanical contract.

There will be a few more projects in this range bid before Thanksgiving but this is the last hurrah for 2012. With a moratorium on schools in the PlanCon design phase in place for 2013 there will be no significant K-12 school bid until well into 2014 at the earliest. The public market is in for a rough couple of years.

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