(Photo by Michael Goodman for ENR)

School construction, spurred on by a surge in student enrollments, has been one of the industry’s strongest markets over the last decade. While state fiscal problems are expected to slow the double-digit growth of recent years, the underlaying demographics will keep the school building market going strong for years to come.

Over the next 10 years, enrollment in K-12 schools is expected to increase an average of 5% a year, says Richard Branch, an economist who tracks the school market for McGraw-Hill Construction Analytics, Lexington, Mass. While this is down from the 20% annual increase in K-12 enrollment during the previous decade, it will be enough to keep the market near peak levels.

Although pressure from enrollment at the elementary school level is expected to ease, an increase in college-bound students will keep construction buzzing. College enrollment is projected to increase 19% a year through 2013, up from a 10% average over the previous 10 years, says Branch.

Through the first 11 months of last year, total school construction put-in-place reached $66.2 billion, according to the U.S. Dept. of Commerce. This is 1.3% more than the same period in 2002 when school construction hit a record high after growing about 12% a year since 1999. Public schools make up 82% of the market and private schools 18%, according to Commerce.

McGraw-Hill Construction expects the dollar value of contract awards for new school construction that it tracks to post another 3% gain in 2003 before flattening out this year, says Branch. However, he notes that a mild slowdown in the square footage being built already has started. McGraw-Hill Construction estimates that the total school market slipped 5% in 2003 to 239 million sq ft and it predicts that the school market’s size will shrink another 12 million sq ft in 2004.

"Virtually all of this decline can be tied to the fiscal budget crisis facing many states," says Branch. But partially offsetting the impact of state budget woes has been a strong bond market for school construction, he adds.

The school market also is very regional, with the strongest growth moving to the South and West as other regions have subsided. For example, the Northeast in 1967 accounted for 24% of the school construction market and the West 16%, according to McGraw-Hill Construction. By 1982, the Northeast’s share of the national market fell to just 9% while the West grew to 23%.

Click below to view more articles related to this story >>

Museum, District Collaborate To Build An Unusual Hybrid

To Help Save Time, Structural Engineer Wears Harder Hat

New Jersey Officials Focus on Bringing In New Blood