Growth Spurt

May 1, 2004 12:00 PM, Joe Agron

Times remain difficult for the nation's school districts and colleges, as the budget-cutting ax continues to strike deeper into staffing, programs and operations. However, when it comes to construction spending, money seems to abound.

The amount of construction put in place in 2003 by the nation's education institutions reached an all-time high, even as spending in other areas was curtailed significantly. According to American School & University's 30th annual Official Education Construction Report, school districts and colleges spent $48.1 billion on construction in 2003. The amount represents an almost 20 percent increase in spending compared with 2002. And there is little sign that the robust spending on construction will slow anytime soon, as almost $150 billion is projected to be spent over the next three years.

School districts reversed a year-earlier slowdown by putting in place $28.6 billion worth of construction, an 18 percent increase over 2002. New construction accounted for 61 percent of the dollars spent as districts continue to scramble to provide space for the influx of students.

Colleges and universities continued their aggressive spending, putting in place $19.5 billion worth of construction in 2003, a 20 percent increase over the year before. New facilities accounted for about three out of every four construction projects completed last year.

Behind the data

The 30^th annual Official Education Construction Report contains myriad data on construction spending in 2003, as well as projected spending through 2006.

Table 1 (p. 24) outlines the amount and type of construction spending by school districts, colleges and all education in 2003. Even as operating budgets continue to suffer, spending on construction remains strong. The $48.1 billion put in place last year was driven by spending on totally new facilities, which accounted for 65 percent of all education-construction expenditures.

School districts are responsible for the majority of education-construction spending — 59 percent — which is comparable to previous years' percentage amounts. Of particular note is the focus districts placed on totally new construction in 2003. Traditionally, additions and modernization make up the larger percentage of K-12 construction spending.

Table 2 (p. 24) details the amount and type of construction projected to be put in place through 2006, as well as a breakout of data by type of institution and by type of spending. Gloomy economic conditions are no deterrent to the need for additional construction as the nation's school districts and colleges project to spend $149.1 billion on projects over the next three years.

About 60 percent of the construction spending through 2006 will be by school districts ($89.8 billion). New construction will account for 63 percent of the spending by school districts and 65 percent of the spending by colleges over this time.

Table 3 (p. 26-27) looks back at the past 10 years of education construction by amount, category and type of institution.

Regional breakouts

Table 4 (p. 28) details regional spending on construction by type of institution. Region 5 (see Key to Regions on p. 26) put in place the most school and college construction in 2003 ($14.6 billion), followed by Region 9 ($7.4 billion) and Region 2 ($6.8 billion). Aggressive construction programs in all of these regions — some as a result of court order — resulted in significant spending that is expected to continue at least for the next few years.

Table 5 (p. 28) focuses on the type of school construction completed in 2003 by region and type of spending (new buildings, additions and modernization). New school facilities accounted for 61 percent of the expenditures, with six of the nine regions spending more than half of their dollars on totally new facilities.

Table 6 (p. 28) looks at the type of college construction completed in 2003 by region and type of spending. New college facilities made up 73 percent of projects, with every region spending more than half of its dollars on new buildings.

Table 7 (p. 30) includes projected spending by region on construction through 2006 by school districts, colleges and universities, and all education. The nation's education institutions expect to complete $149.1 billion worth of construction over the next three years.

Slightly more than half of the construction spending will take place in just three regions. Region 9 will account for the bulk of the construction spending ($35.4 billion), followed by Region 5 ($25.1 billion) and Region 2 (17.2 billion). These regions also were the most active construction regions in 2003.

For school districts, the most active construction region will be Region 5 ($17.5 billion), followed closely by Region 9 ($16.9 billion) and Region 8 ($12.9 billion). Region 9 will be the most active construction region through 2006 on the college front, spending $18.5 billion over this time. Regions 3, 5 and 2 follow, with each expecting to spend in the $7.5-billion range.

Table 8 (p. 32) details how the school construction dollars through 2006 will be split. Only four regions will be spending more than half of their construction dollars on new facilities. The majority will be allocating a larger percentage of their spending to additions and modernization. But when broken out nationally, 63 percent of the total dollars school districts project to spend on construction over the next three years will go toward new facilities. This primarily is due to the most active regions (5, 8 and 9) spending more of their money on new facilities.

Table 9 (p. 32) focuses on how higher-education construction dollars will be split over the next three years. Every region will spend more than half of its dollars on new construction, with 65 percent of the total dollars put toward new buildings.

In the details

Table 10 (p. 34) details a variety of cost and size data for the national median new elementary, middle and high school, as well as all schools. Of particular note, middle schools are the most expensive to build per square foot ($194) and per student ($22,933).

Table 11 (p. 34) outlines the types of retrofits performed in 2003 by type of institution. Energy-related retrofits continue to be the most often performed retrofit at both schools and colleges.

Agron, editor-in-chief, can be reached at jagron@primediabusiness.com.

The ultimate resource

As the bellwether report documenting education construction activity for the past 30 years, the American School & University survey is regularly referenced by local, state and federal agencies, as well as the nation's leading news organizations. AS&U actually started compiling data on school and university construction in 1950 for the 1949 year. After a decade or so of yearly surveys, data began being compiled sporadically until industry demand prompted AS&U to start collecting data annually again. The annual reports resurfaced in 1975 with information on education construction completed in 1974, and data has been collected and published every year since. American School & University is the only authorized source of this education construction information.

TABLE 1

Education construction completed in 2003
($000s)

The National Picture
SCHOOL DISTRICTS
	$17,446,903	New
	$5,284,944	Additions
	$5,906,205	Modernizations
	$28,638,052	TOTAL
COLLEGES
	$14,149,128	New
	$891,238	Additions
	$4,429,175	Modernizations
	$19,469,541	TOTAL
ALL EDUCATION
	$31,596,031	New
	$6,176,182	Additions
	$10,335,380	Modernizations
	$48,107,593	TOTAL

TABLE 2

Education construction projected to be completed in 2004-2006
($000s)

The National Picture
SCHOOL DISTRICTS
	$56,907,908	New
	$11,768,079	Additions
	$21,137,419	Modernizations
	$89,813,406	TOTAL
COLLEGES
	$38,545,373	New
	$6,507,711	Additions
	$14,196,030	Modernizations
	$59,249,114	TOTAL
ALL EDUCATION
	$95,453,281	New
	$18,275,790	Additions
	$35,333,449	Modernizations
	$149,062,520	TOTAL

TABLE 3

Education construction: Reaching new heights

($ Billions)	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003
School Districts	$10.687	$10.417	$10.964	$12.394	$17.095	$16.039	$21.567	$26.777	$24.343	$28.638
Colleges	$6.421	$6.717	$7.235	$7.530	$7.330	$13.964	$14.703	$14.732	$16.205	$19.469
All Education	$17.108	$17.134	$18.199	$19.924	$24.425	$30.003	$36.270	$41.509	$40.548	$48.107
New Construction	$8.315	$7.970	$9.642	$10.471	$12.097	$14.431	$19.139	$20.112	$22.505	$31.596
Additions	$3.731	$4.922	$4.002	$4.249	$6.160	$7.043	$4.936	$5.814	$8.014	$6.176
Modernizations	$5.062	$4.242	$4.555	$5.204	$6.168	$8.529	$12.195	$15.583	$10.029	$10.335

TABLE 4

Education construction, 2003: By type of institution
($000)

Region	Schools	Colleges	All Education
1	$1,606,276	$409,375	$2,015,651
2	$4,063,544	$2,744,156	$6,807,700
3	$1,986,845	$2,506,858	$4,493,703
4	$1,745,142	$2,243,464	$3,988,606
5	$10,899,093	$3,687,588	$14,586,681
6	$682,607	$1,983,775	$2,666,382
7	$1,076,549	$972,863	$2,049,412
8	$2,408,560	$1,706,626	$4,115,186
9	$4,169,436	$3,214,836	$7,384,272
Nat'l	$28,638,052	$19,469,541	$48,107,593

TABLE 5

School construction, 2003: By type of construction
($000)

	Total dollars spent		% of dollars spent
Region	New Bldgs	Adds/Mods	New Bldgs	Adds/Mods
1	$669,083	$937,193	41.7%	58.3%
2	$2,329,632	$1,733,912	57.3%	42.7%
3	$1,105,071	$881,774	55.6%	44.4%
4	$744,445	$1,000,697	42.7%	57.3%
5	$7,392,800	$3,506,293	67.8%	32.2%
6	$453,364	$229,243	66.4%	33.6%
7	$390,643	$685,906	36.3%	63.7%
8	$1,951,933	$456,627	81.0%	19.0%
9	$2,409,932	$1,759,504	57.8%	42.2%
Nat'l	$17,446,903	$11,191,149	60.9%	39.1%

TABLE 6

College construction, 2003: By type of construction
($000)

	Total dollars spent		% of dollars spent
Region	New Bldgs	Adds/Mods	New Bldgs	Adds/Mods
1	$269,029	$140,346	65.7%	34.3%
2	$1,683,262	$1,060,894	61.3%	38.7%
3	$1,905,993	$600,865	76.0%	24.0%
4	$1,808,915	$434,549	80.6%	19.4%
5	$2,962,084	$725,504	80.3%	19.7%
6	$1,515,498	$468,277	76.4%	23.6%
7	$603,778	$369,085	62.1%	37.9%
8	$906,330	$800,296	53.1%	46.9%
9	$2,494,239	$720,597	77.6%	22.4%
Nat'l	$14,149,128	$5,320,413	72.7%	27.3%

TABLE 7

Education construction projected to be completed, 2004-2006
($000)

The Regional Picture
Region	Schools	Colleges	Total
1	$8,861,523	$3,356,869	$12,218,392
2	$9,575,951	$7,611,189	$17,187,140
3	$4,831,364	$7,763,144	$12,594,508
4	$9,265,659	$5,685,229	$14,950,888
5	$17,474,378	$7,632,358	$25,106,736
6	$7,401,730	$5,598,237	$12,999,967
7	$2,659,890	$ 778,519	$3,438,409
8	$12,867,200	$2,291,615	$15,158,815
9	$16,875,711	$18,531,954	$35,407,665
Nat'l	$89,813,406	$59,249,114	$149,062,520

Methodology

To arrive at results for the 30th annual Official Education Construction Report, a detailed questionnaire was mailed in October 2003 to chief business officials at the nation's school districts and colleges. Basically, two questions were asked:

• Did you complete any construction during the past year?
• Will you complete any construction in the next three years?

Administrators answering “yes” to either question were then asked to provide a variety of details on the amount being spent, the type of construction being done (new, addition or modernization), and the expected completion date. All respondents involved with new and retrofit construction were asked to provide additional information on each project. Further follow-up calls were made to clarify some data. Responses were separated by institution type, region of the country and institution size, and projected across the education universe.

TABLE 8

How the school construction dollars are projected to be split, 2004-2006

Total School Construction ($000)
Region	New	Adds/Mods	% New	% Adds/Mods
1	$3,756,865	$5,104,658	42.4%	57.6%
2	$4,129,447	$5,446,504	43.1%	56.9%
3	$1,556,182	$3,275,182	32.2%	67.8%
4	$6,191,796	$3,073,863	66.8%	33.2%
5	$14,753,369	$2,721,010	84.4%	15.6%
6	$2,724,961	$4,676,769	36.8%	63.2%
7	$795,565	$1,864,326	29.9%	70.1%
8	$10,641,566	$2,225,633	82.7%	17.3%
9	$12,358,157	$4,517,553	73.2%	26.8%
Nat'l	$56,907,908	$32,905,498	63.4%	36.6%

TABLE 9

How the college construction dollars are projected to be split, 2004-2006

Total College Construction ($000)
Region	New	Adds/Mods	% New	% Adds/Mods
1	$1,979,378	$1,377,491	59.0%	41.0%
2	$4,594,706	$3,016,483	60.4%	39.6%
3	$5,015,238	$2,747,906	64.6%	35.4%
4	$3,450,137	$2,235,092	60.7%	39.3%
5	$4,097,829	$3,534,530	53.7%	46.3%
6	$4,118,908	$1,479,329	73.6%	26.4%
7	$531,321	$247,198	68.2%	31.8%
8	$1,624,256	$667,359	70.9%	29.1%
9	$13,133,600	$5,398,353	70.9%	29.1%
Nat'l	$38,545,373	$20,703,741	65.1%	34.9%

TABLE 10

How much does a new school cost?
(MEDIAN)

	Elementary	Middle	High*	All
Cost/Square Foot	$114	$194	$118	$120
Cost/Student	$13,853	$22,933	$20,896	$19,168
Square Feet/Student	133	141	178	150
Number of Pupils	500	700	1,450	680
Size (sq. ft.)	65,000	110,000	244,548	80,018
Total Cost ($000)	$6,650	$18,450	$25,900	$9,000
*Includes supplemental data from AS&U's 2003 Architectural Portfolio.

TABLE 11

Retrofits performed
When schools and universities renovated facilities in 2003, these were the types of retrofits most often performed (by percentage of projects):

	Schools	Colleges
ADA Compliance	39%	51%
Carpeting	33%	57%
Electric	49%	73%
Flooring	41%	67%
HVAC	52%	63%
Indoor Air Quality	15%	26%
Lighting	47%	69%
Painting/Interior Trim	41%	73%
Plumbing	35%	62%
Roofing	30%	32%
Security/Life Safety	24%	41%
Technology Infrastructure	32%	58%
Windows/Doors	41%	50%

Top 5 most active construction regions, 2003: By institution type

SCHOOLS		COLLEGES		ALL EDUCATION
Region	($000)	Region	($000)	Region	($000)
5	$10,899,093	5	$3,687,588	5	$14,586,681
9	$4,169,436	9	$3,214,836	9	$7,384,272
2	$4,063,544	2	$2,744,156	2	$6,807,700
8	$2,408,560	3	$2,506,858	3	$4,493,703
3	$1,986,845	4	$2,243,464	8	$4,115,186

Key to regions

	CT MA ME NH RI VT
Region 1:	NJ NY
Region 2:	DC DE MD PA VA WV
Region 3:	AL FL GA KY MS NC SC TN
Region 4:	IL IN MI MN OH WI
Region 5:	AR LA NM OK TX
Region 6:	IA KS MO NE
Region 7:	AK CO ID MT ND OR SD UT
Region 8:	WA WY
Region 9:	AZ CA HI NV