Stalled Momentum: 32nd Annual Official Education Construction Report

The old adage, “what goes up must come down,” can be used to describe education construction spending in 2005. After impressive gains in expenditures during the first half of the decade, total construction spending by schools and universities pulled back from historic highs.

A combination of factors, including skyrocketing fuel and building-materials costs, resulted in education institutions trimming down or even putting the brakes on projects. According to American School & University's 32nd annual Official Education Construction Report, total spending on new, addition and retrofit construction by the nation's school districts and higher-education institutions amounted to $37.5 billion in 2005, down from $41.3 billion in 2004.

Reduced spending by school districts accounted for the drop in total spending; colleges and universities actually increased their construction expenditures in 2005. About $23 billion worth of construction was completed by school districts last year, down from $29 billion in 2004. Higher-education-institution spending rose to $14.5 billion in 2005 ($12.1 billion the year before).

Methodology

To arrive at results for the 32nd annual Official Education Construction Report, a detailed questionnaire was sent 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 correspondence was 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 1: Education construction completed in 2005 ($000s)

The National Picture SCHOOL DISTRICTS $12,288,663 New $6,150,856 Additions $4,522,403 Modernizations $22,961,922 TOTAL COLLEGES $8,931,688 New $2,732,685 Additions $2,896,670 Modernizations $14,561,043 TOTAL ALL EDUCATION $21,220,351 New $8,883,541 Additions $7,419,073 Modernizations $37,522,965 TOTAL

Table 1 breaks out the amount and type of construction spending by school districts, colleges and all education institutions in 2005. Although the amount spent on K-12 construction projects decreased from the year before, the biggest drop was in modernization spending — a result of districts postponing many of the projects planned because of rapidly rising costs. The amount spent by schools on new construction and additions remained about the same in 2005 compared with 2004. Colleges bumped up their spending in 2005, increasing expenditures in all areas except modernization. New construction garnered the majority of the dollars at both school districts and colleges.

TABLE 2: Education construction projected to be completed in 2006-2008 ($000s)

The National Picture SCHOOL DISTRICTS $46,238,828 New $16,340,922 Additions $17,601,429 Modernizations $80,181,179 TOTAL COLLEGES $30,047,478 New $7,508,261 Additions $7,143,334 Modernizations $44,699,073 TOTAL ALL EDUCATION $76,286,306 New $23,849,183 Additions $24,744,763 Modernizations $124,880,252 TOTAL

Table 2 details the amount and type of construction projected to be completed through 2008 by type of institution and type of spending. Schools and universities expect to spend about $125 billion on projects over the next three years. New construction will make up the bulk of the spending (61 percent), with school districts allocating 58 percent of their construction dollars and colleges 67 percent.

TABLE 3: Education construction: Breakouts over the decade

($ Billions) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 School Districts $10.964 $12.394 $17.095 $16.039 $21.567 $26.777 $24.343 $28.638 $29.088 $22.962 Colleges $7.235 $7.530 $7.330 $13.964 $14.703 $14.732 $16.205 $19.469 $12.186 $14.561 All Education $18.199 $19.924 $24.425 $30.003 $36.270 $41.509 $40.548 $48.107 $41.274 $37.523 New Construction $9.642 $10.471 $12.097 $14.431 $19.139 $20.112 $22.505 $31.596 $20.656 $21.220 Additions $4.002 $4.249 $6.160 $7.043 $4.936 $5.814 $8.014 $6.176 $7.124 $8.884 Modernizations $4.555 $5.204 $6.168 $8.529 $12.195 $15.583 $10.029 $10.335 $13.494 $7.419

Table 3 outlines the past 10 years of education construction by amount, category and type of institution.

TABLE 4: Education construction, 2005: By type of institution 

($000)

Region Schools Colleges All Education Midwest $3,911,383 $5,328,364 $9,239,747 Northeast $4,093,284 $1,915,768 $6,009,052 South $9,671,246 $4,457,464 $14,128,710 West $5,286,009 $2,859,447 $8,145,456 Nat'l $22,961,922 $14,561,043 $37,522,965

Table 4 charts regional spending on construction by type of institution. This year's breakout of regions conforms to regional categories as broken out by U.S. Department of Education data for easier comparison. The most active region for total education construction spending in 2005 was the South, putting in place more than $14 billion in projects.

TABLE 5: School construction, 2005: By type of construction ($000)

Total dollars spent % of dollars spent Region New Bldgs Adds/Mods New Bldgs Adds/Mods Midwest $1,461,866 $2,449,517 37.4% 62.6% Northeast $1,681,500 $2,411,784 41.1% 58.9% South $4,674,622 $4,996,624 48.3% 51.7% West $4,470,675 $814,334 84.6% 15.4% Nat'l $12,288,663 $10,673,259 53.5% 46.5%

Table 5 highlights the type of school construction completed in 2005 by region and type of spending (new buildings, additions and modernizations). Totally new construction accounted for about 54 percent of all K-12 construction spending — a reversal of where the money was spent in 2004.

TABLE 6: College construction, 2005: By type of construction ($000)

Total dollars spent % of dollars spent Region New Bldgs Adds/Mods New Bldgs Adds/Mods Midwest $2,880,143 $2,448,221 54.1% 45.9% Northeast $1,338,522 $577,246 69.9% 30.1% South $2,619,517 $1,837,947 58.8% 41.2% West $2,093,506 $765,941 73.2% 26.8% Nat'l $8,931,688 $5,629,355 61.3% 38.7%

Table 6 lists the type of college construction completed in 2005 by region and type of spending. As is traditionally the case, new college facilities accounted for the bulk of the spending (61.3 percent), with all regions spending more than half of their dollars on new buildings.

TABLE 7: Education construction projected to be completed, 2006-2008 ($000)

The Regional Picture Region Schools Colleges Total Midwest $16,473,489 $12,637,815 $29,111,304 Northeast $9,018,682 $7,545,379 $16,564,061 South $29,521,758 $16,951,869 $46,473,627 West $25,167,250 $7,564,010 $32,731,260 Nat'l $80,181,179 $44,699,073 $124,880,252

Table 7 details projected spending on construction by region through 2008 by school districts, colleges and universities, and all education. About $125 billion is expected to be completed by the nation's education institutions over the next three years. School districts will account for 64 percent of the spending.

TABLE 8: How the school construction dollars are projected to be split, 2006-2008

Total School Construction ($000) Region New Adds/Mods % New % Adds/Mods Midwest $8,185,567 $8,287,922 49.7% 50.3% Northeast $3,531,150 $5,487,532 39.2% 60.8% South $19,477,279 $10,044,479 66.0% 34.0% West $15,044,832 $10,122,418 59.8% 40.2% Nat'l $46,238,828 $33,942,351 57.7% 42.3%

Table 8 looks at how the school construction dollars through 2008 will be divided. More than half of the dollars (57.7 percent) will go toward totally new facilities. The two most active regions (South and West) reflect where the school-age population will be growing over the next decade.

TABLE 9: How the college construction dollars are projected to be split, 2006-2008

Total College Construction ($000) Region New Adds/Mods % New % Adds/Mods Midwest $6,975,408 $5,662,407 55.2% 44.8% Northeast $5,814,305 $1,731,074 77.1% 22.9% South $13,117,385 $3,834,484 77.4% 22.6% West $4,140,380 $3,423,630 54.7% 45.3% Nat'l $30,047,478 $14,651,595 67.2% 32.8%

Table 9 focuses on how college and university construction dollars will be split over the next three years. More than 67 percent of the dollars will be spent on totally new facilities, with every region allocating more than half of its funds to new construction.

TABLE 10: How much does a new school cost? (MEDIAN)

  Elementary Middle High All Cost/Square Foot $141 $195 $180 $173 Cost/Student $14,286 $24,071 $23,958 $21,265 Sq. Ft./Student 97 123 125 113 Number of Pupils 725 750 1,055 750 Size (sq. ft.) 73,000 104,880 148,569 73,000 Total Cost ($000) $14,821 $17,452 $25,000 $17,452

Table 10 reflects 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 is the reduction in the amount of square feet per student. In a move to trim costs, school districts cut back the amount of space provided in new facilities, a stark reversal from a trend of steadily increasing numbers.

TABLE 11: What retrofits are being performed

When schools and universities renovated facilities in 2005, these were the types of retrofits most often performed (by percentage of projects):

  Schools Colleges ADA Compliance 51% 59% Carpeting 81% 77% Electric 93% 79% Flooring 93% 67% HVAC 65% 73% Indoor Air Quality 49% 27% Lighting 79% 87% Painting/Interior Trim 84% 85% Plumbing 74% 60% Roofing 74% 33% Security/Life Safety 49% 45% Technology Infrastructure 67% 57% Windows/Doors 77% 52%

Table 11 outlines the types of retrofits most often performed in 2005 by type of institution.

Key to Regions

Midwest

IL, IN, IA, KS, MI, MN, MO, ND, NE, OH, SD, WI

Northeast

CT, MA, ME, NH, NJ, NY, PA, RI, VT

South

AL, AR, DC, DE, FL, GA, KY, LA, MD, MS, NC, OK, SC, TN, TX, VA, WV

West

AK, AZ, CA, CO, HI, ID, MT, NM, NV, OR, UT, WA, WY

The ultimate resource

As the bellwether report documenting education construction activity for the past 32 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, AS&U compiled data 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.

Agron is editor-in-chief of AS&U.