Strong Showing: The 29th Annual Official Education Construction Report

May 1, 2003 12:00 PM, Joe Agron

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As the nation's economy continues to suffer, and school districts and colleges are forced to make significant cuts in programs and staff, one area continues to show surprising strength — education construction spending.

According to American School & University's 29th annual Official Education Construction Report, education institutions spent $40.5 billion on construction in 2002. While shy of the $41.5 billion spent on new facilities, additions and modernization of existing buildings in 2001, the figure represents the second highest amount in history. And over the next three years, education construction spending is projected to remain robust.

Colleges and universities continued to spend record amounts on construction as physical-plant needs escalate and enrollment climbs. Higher-education institutions spent $16.2 billion on new facilities, additions and modernization of existing buildings in 2002. This represents a 10 percent increase over the $14.7 billion spent in 2001.

While overall school construction slowed to $24.3 billion in 2002 from $26.8 billion the year before, spending on new school construction reached an all-time high $11.7 billion. Even so, new construction represents only 48 percent of school district capital expenditures; the remaining 52 percent is spent on additions and modernization.

Primary findings

Table 1 details the amount and type of construction spending by schools and colleges in 2002. The $40.5 billion in construction spending completed last year is just 2 percent shy of the record $41.5 billion spent in 2001, proving the education construction market's strength and resiliency in tough economic times.

Elementary and secondary schools continue to account for the majority of education construction spending (60 percent). Both school districts and colleges put in place record amounts of new construction in 2002, as rapidly rising enrollments fueled the demand for more space.

Table 2 outlines the amount and type of construction projected to be put in place through 2005, as well as a breakout of data by type of institution and type of spending. Geopolitical issues and economic concerns don't seem to be dissuading education administrators — as $148.8 billion worth of construction is projected to be put in place over the next three years.

School districts will continue to account for the majority of the education construction spending through 2005 (63 percent or $93.7 billion). New construction will make up more than half of the spending by elementary and secondary institutions (55 percent).

Colleges and universities will continue their strong spending on construction through 2005. Over the next three years, higher-education institutions expect to put in place $55 billion worth of construction. New facilities will make up the majority of the projects (76 percent).

Table 3 offers a look at education construction by amount and category, as well as by type of institution, over the past 10 years.

The regional picture

Table 4 outlines the five most active construction regions broken out by school districts, colleges and all education. A map of the regions can be found above.

Table 5 breaks out the type of education construction completed in 2002 by region and type of spending (new buildings, additions and modernization). New school facilities made up 55 percent of the spending, while additions accounted for 20 percent and modernization 25 percent.

For a look ahead at where the education construction dollars will be spent, turn to Table 6, which details projected spending by region on construction through 2005 by school districts, colleges and universities, and all education.

The nation's school and university administrators expect to complete almost $149 billion worth of construction over the next three years. Approximately 56 percent of all education construction will take place in just three regions. Regions 9, 5 and 2 expect to complete almost $83 billion in projects. Region 9 will be the most active construction region, with estimated spending through 2005 of $32.6 billion.

On the school district front, 71 percent of the $93.7 billion projected to be spent over the next three years will be completed by four regions (5, 9, 1 and 2), with Region 5 topping the list at $22.8 billion. College construction is more evenly distributed throughout the regions, with Region 9 projecting the most at $12.9 billion.

Table 7 details how the school construction dollars through 2005 will be split. Six regions will be spending the majority of their construction dollars on totally new facilities. Of the three that will be spending the bulk on additions and modernization, Regions 7 and 5 will be allocating the largest percentage amounts (64.9 percent and 64 percent, respectively).

Table 8 outlines how the college and university construction dollars will be split over the next three years. All but one region (8) will spend significantly more than half of its dollars on new construction.

Building specifics

Table 9 outlines a variety of cost data and facility features for both the national median and national mean (average) new elementary, middle and high school.

Table 10 provides information on the types of retrofits performed in 2002 by schools and colleges. At the school district level, those retrofits performed most often are energy related, such as HVAC (70 percent) and lighting (69 percent). Colleges focused more on aesthetic aspects, such as painting/interior trim (79 percent) and carpeting/flooring (both 67 percent). Energy-related retrofits also were popular, with electric, lighting and HVAC most often done.

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

TABLE 1: Education construction completed in 2002
($000s)

The National Picture
SCHOOL DISTRICTS
	$11,659,722	New
	$5,683,365	Additions
	$7,000,376	Modernizations
	$24,343,463	TOTAL
COLLEGES
	$10,845,043	New
	$2,331,021	Additions
	$3,028,440	Modernizations
	$16,204,504	TOTAL
ALL EDUCATION
	$22,504,765	New
	$8,014,386	Additions
	$10,028,816	Modernizations
	$40,547,967	TOTAL

TABLE 2: Education construction projected to be completed in 2003-2005
($000s)

The National Picture
SCHOOL DISTRICTS
	$51,162,337	New
	$15,352,273	Additions
	$27,208,060	Modernizations
	$93,722,670	TOTAL
COLLEGES
	$41,833,428	New
	$4,317,162	Additions
	$8,877,753	Modernizations
	$55,028,343	TOTAL
ALL EDUCATION
	$92,995,765	New
	$19,669,435	Additions
	$36,085,813	Modernizations
	$148,751,013	TOTAL

TABLE 3: Education construction: A decade of activity

($ Billions)	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002
School Districts	$10.778	$10.687	$10.417	$10.964	$12.394	$17.095	$16.039	$21.567	$26.777	$24.343
Colleges	$6.408	$6.421	$6.717	$7.235	$7.530	$7.330	$13.964	$14.703	$14.732	$16.205
All Education	$17.186	$17.108	$17.134	$18.199	$19.924	$24.425	$30.003	$36.270	$41.509	$40.548
New Construction	$8.216	$8.315	$7.970	$9.642	$10.471	$12.097	$14.431	$19.139	$20.112	$22.505
Additions	$4.048	$3.731	$4.922	$4.002	$4.249	$6.160	$7.043	$4.936	$5.814	$8.014
Modernizations	$4.922	$5.062	$4.242	$4.555	$5.204	$6.168	$8.529	$12.195	$15.583	$10.029

TABLE 4: Top 5 most active construction regions, 2002: By institution type

SCHOOLS		COLLEGES		ALL EDUCATION
Region	($000)	Region	($000)	Region	($000)
2	$4,484,506	5	$3,239,836	9	$6,810,187
9	$3,786,388	9	$3,023,799	2	$6,357,638
1	$3,057,880	4	$2,619,755	4	$5,232,589
6	$2,727,535	3	$2,499,664	5	$4,804,785
4	$2,612,834	2	$1,873,122	3	$4,274,423

The ultimate resource

As the bellwether report documenting education construction activity for the past 29 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 information.

TABLE 5: Education construction, 2002: By type of spending
($000)

Total dollars spent
Region	New Bldgs	Adds	Mods	Total
1	$2,448,607	$688,075	$856,107	$3,992,789
2	$2,061,033	$2,368,453	$1,928,151	$6,357,637
3	$2,596,321	$616,163	$1,061,939	$4,274,423
4	$2,797,931	$1,322,672	$1,111,986	$5,232,589
5	$2,464,498	$889,386	$1,450,901	$4,804,785
6	$2,634,613	$618,888	$403,049	$3,656,550
7	$793,843	$561,603	$1,246,269	$2,601,715
8	$1,967,199	$319,728	$530,365	$2,817,292
9	$4,740,720	$629,418	$1,440,049	$6,810,187
Nat'l	$22,504,765	$8,014,386	$10,028,816	$40,547,967

TABLE 6: Education construction projected to be completed, 2003-2005
($000)

The Regional Picture
Region	Schools	Colleges	Total
1	$14,980,524	$3,141,576	$18,122,100
2	$13,158,192	$8,943,480	$22,101,672
3	$6,259,279	$8,707,980	$14,967,259
4	$7,375,617	$7,060,310	$14,435,927
5	$22,805,141	$5,236,035	$28,041,176
6	$1,764,464	$5,042,601	$6,807,065
7	$1,169,966	$1,287,328	$2,457,294
8	$6,449,941	$2,732,569	$9,182,510
9	$19,759,546	$12,876,464	$32,636,010
Nat'l	$93,722,670	$55,028,343	$148,751,013

Methodology

To arrive at results for the 29th annual Official Education Construction Report, a detailed questionnaire was mailed in September 2002 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 7: How the school construction dollars are projected to be split, 2003-2005

Total School Construction ($000)
Region	New	Adds/Mods	% New	% Adds/Mods
1	$6,755,563	$8,224,961	45.10%	54.90%
2	$7,484,456	$5,673,736	56.88%	43.12%
3	$3,424,235	$2,835,044	54.71%	45.29%
4	$3,959,264	$3,416,353	53.68%	46.32%
5	$8,198,957	$14,606,184	35.95%	64.05%
6	$1,306,830	$457,634	74.06%	25.94%
7	$410,606	$759,360	35.10%	64.90%
8	$4,864,648	$1,585,293	75.42%	24.58%
9	$14,757,777	$5,001,769	74.69%	25.31%
Nat'1	$51,162,336	$42,560,334	54.59%	45.41%

TABLE 8: How the college construction dollars are projected to be split, 2003-2005

Total College Construction ($000)
Region	New	Adds/Mods	% New	% Adds/Mods
1	$2,312,563	$829,013	73.61%	26.39%
2	$7,030,800	$1,912,680	78.61%	21.39%
3	$6,158,038	$2,549,942	70.72%	29.28%
4	$5,811,584	$1,248,726	82.31%	17.69%
5	$3,873,807	$1,362,228	73.98%	26.02%
6	$4,280,395	$762,206	84.88%	15.12%
7	$927,081	$360,247	72.02%	27.98%
8	$1,125,642	$1,606,927	41.19%	58.81%
9	$10,313,517	$2,562,947	80.10%	19.90%
Nat'l	$41,833,427	$13,194,916	76.02%	23.98%

TABLE 9: How much does a new school cost?

(MEAN)
	Elementary	Middle	High	All
Cost/Square Foot	$128	$149	$158	$134
Cost/Student	$16,795	$22,804	$23,409	$18,167
Square Feet/Student	134	153	166	138
Number of Pupils	515	650	979	675
Size (sq. ft.)	70,174	109,152	125,304	86,055
Total Cost ($000)	$8,016	$16,033	$19,067	$11,825
(MEDIAN)
	Elementary	Middle	High	All
Cost/Square Foot	$113	$167	$123	$113
Cost/Student	$16,462	$20,000	$16,616	$16,462
Square Feet/Student	146	159	134	141
Number of Pupils	650	850	765	650
Size (sq. ft.)	75,000	135,455	114,000	92,800
Total Cost ($000)	$8,850	$13,100	$10,400	$9,000

TABLE 10: Type of retrofits performed

When schools and universities renovated facilities in 2002, these were the types of retrofits most often performed (by percentage of projects):

	Schools	Colleges
ADA Compliance	66%	64%
Carpeting	51%	67%
Electric	64%	76%
Flooring	55%	67%
HVAC	70%	67%
Indoor Air Quality	42%	30%
Lighting	69%	74%
Painting/Interior Trim	60%	79%
Plumbing	54%	60%
Roofing	40%	25%
Security/Life Safety	39%	45%
Technology Infrastructure	45%	53%
Windows/Doors	54%	57%

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