Intelligencer Journal/Lancaster New Era

Hammers fall silent County construction contracts fall to lowest level since 1994
BY TIM MEKEEL, Business Editor

Construction contracts here fell again last year, a new report says, tumbling to their lowest mark since 1994.

Contracts signed during 2012 for future construction of local buildings totaled $320.8 million, said McGraw-Hill Construction.

That was down 14 percent from 2011's $373.2 million, said the data firm, which tracks construction activity.

Unfortunately for the county economy, down is the only direction that contracts have been going lately.

"It's been on a steady decline since 2006," when contracts here hit a record high of $858 million, McGraw-Hill's Kim Kennedy said.

Kennedy, manager of forecasting, said Monday that contracts in Lancaster County have dropped for six straight years.

That prolonged slump left 2012 contracts for construction of buildings in Lancaster County the smallest since 1994's $320.6 million, she said.

The anemic full-year figure got no help from the December data.

Total contracts that month plunged 78 percent to $12.8 million from December 2011's $58.2 million.

It was the fifth straight monthly decline in construction contracts in Lancaster County.

Taking a closer look at the full-year figures, the total was undermined by a dip in nonresidential contracts.

Nonresidential contracts decreased 31 percent to $140.2 million.

That was severe enough to offset growth in residential contracts, which were up 6 percent to $180.6 million.

Nationally, the two sectors moved in the same direction as the local sectors, albeit to a lesser extent.

Nonresidential contracts nationwide were off just 7 percent, while residential contracts grew an impressive 30 percent, said Kennedy.

"Of course, (the residential contracts figure) was being compared to a very low level" in 2011, she observed.

What was the result of this combination of a modest drop in nonresidential contracts plus a hefty rise on residential side?

Taken together, they yielded a 9 percent uptick in overall construction contracts nationwide last year, Kennedy said.

It was enough for the McGraw-Hill official to call 2012 "a turnaround year nationally."

"Turnaround" is not a term associated with the county's recent level of construction activity, however.

Dragging down the December total was weakness in both the nonresidential and residential sectors.

There were zero nonresidential contracts signed that month, versus $44 million worth in December 2011.

Residential contracts retreated 10 percent to $12.8 million, McGraw-Hill said.

Residential buildings include single-family homes, duplexes, town houses and apartments.

Nonresidential buildings include commercial, manufacturing, educational, religious, office and other types of structures.

Because the figures are composed solely of contracts for construction of buildings, they exclude contracts for public-works projects such as bridges, roads and sewer plants.

tmekeel@lnpnews.com