Construction in 2006 has continued many of the trends that were evident in 2004 and 2005.  All regions of the country are now experiencing growth in construction activity, with growth ranging from the very strong sustained growth in the west and south east, to the relatively weak growth in the Midwest and northern plains states. Escalation is also remaining high, and bids continue to be volatile, with significant bid overages in individual trades in many areas.

For the remainder of 2006, we anticipate that escalation will continue to be high, but at a reduced pace from the past two to three years.  More  worrying, however, in some parts of the country, is the increased likelihood of bid overages in highly constrained trades. This is particularly evident in certain trades, such as pre-cast, glazing, drywall, mechanical and electrical, but is present to some degree in all trades. Bidders have become very selective in the projects they bid, and costs have varied between projects bid at the same time by as much as 20%, based simply on how bidders viewed the attractiveness of the work.