Economists are predicting that overall construction in 2002 will be close to last year's record volume and with a little bit of luck it could even eke out a small gain. But while volume is near its peak, the selling price of construction is more reminiscent of a recession. The steep falloff in several private nonresidential building markets has contractors migrating to where the work is and cutting their margins to get it.
"Competition is intense and it is driving prices down, especially for electrical and mechanical work," says Paul Nash, director of cost management for Gardiner & Theobald's New York City office. G&T is seeing bids for electrical work 10 to 15% lower than a year ago. "At the moment we are putting very little into our escalation estimates," Nash says.