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K-12 Education Update

Mar 1, 2006 12:00 PM, By Ellen Parson, Managing Editor

Driven by school-age population growth in the West and the South regions of the country, enrollment in K-12 institutions is expected to rise by nearly 2 million students — from 54.7 million to 56.7 million — between 2005 and 2014. Not only does this sobering statistic demonstrate impressive growth in an important segment of the construction industry, but it also spells opportunity for electrical contractors looking to increase their volume of work in this niche.

“A major challenge for K-12 institutions is finding a way to meet the construction needs that a rapidly growing school-age population is causing,” says Joe Agron, editor-in-chief of American School & University magazine, a 75-year-old trade publication based in Overland Park, Kan., that targets educational facilities and business professionals responsible for the planning, design, construction, retrofit, operations, maintenance, and management of education facilities. “School districts will need to not only add additional space to accommodate the influx of students but also to repair and upgrade existing facilities to provide an adequate learning environment.”

According to its “31st Annual Official Education Construction Report,” AS&U notes that educational institutions (K-12 and higher education combined) put in place $41.3 billion worth of construction in 2004. Looking ahead, construction will continue to be strong in this market, with more than $135 billion projected to be spent through 2007.

For K-12, the national picture for construction projected to be completed between 2005-2007 is forecast to hit $93.1 million. That breaks down into $53.6 million for new construction, $16.5 million for additions, and $23.1 million for modernizations. How will the dollars be spent? As shown in the Table, more than half of the money will go toward building new facilities. In fact, all but two areas (Regions 5 and 7) will be spending more than half of their construction dollars on totally new facilities.

On the retrofit front, when schools renovated facilities in 2004, they typically spent 44% of their retrofit budget on “electrical.” As a whole, elementary, middle, and high schools divided the cost of new construction into the following allocations: construction (80%), site purchase (5%), site development (4%), furnishing and equipment (4%), and other (7%). According to the AS&U construction report, the type of K-12 facility most often built in 2004 were: elementary (36%), middle schools (17%), high schools (23%), vocational (2%), and other (22%).

Raleigh, N.C.-based FMI Corp., a management consulting and investment banking firm to the worldwide construction industry, is also calling for a robust education market through 2009, estimating that construction put in place will increase 49% from $80 billion in 2005 to $120 billion in 2009. According to its “2005-06 U.S. Markets Construction Overview,” several trends are affecting education design and construction as enrollment in public and elementary/secondary schools is expected to jump 4% between 2005 and 2014. However, this increase will play out differently for each state. Increases are projected for 23 states with the largest growth projected for Nevada (28.4%), Texas (16.6%), Utah (14.9%), Arizona (14.5%), and California (14.2%). Eleven states are expected to post between 5% and 15% increases, and 10 states are forecast to bring in a 5% rise. Decreases are projected for 27 states, with the largest declines projected for Vermont (-15.2%), Maine (-12.8%), North Dakota (-10.2%), West Virginia (-9.8%), and Pennsylvania (-7.7%).

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