Build out: new construction brings expanded possibilities.

• Author: Creager, Janine S.
• Position: Special Section Building Utah

When searching for a title for an article about Utah's construction industry, it all depends on the point of reference. Considering all those new skyscrapers included as part of Downtown Rising, how about titling it "Reaching New Heights"? But then there's the FrontRunner commuter train, Legacy Parkway, TRAX expansions and upgrades to existing highways. If we look at the industry from this angle, we could just call it "Going the Distance." In the end, no matter what perspective may be employed, the bottom line is: things are looking pretty good here in the Beehive State.

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Utah has always had a tradition of bucking national economic trends, explains Rich Thorn, president and CEO of the Utah Chapter of Associated General Contractors (AGC). But the fact that the lows and highs in the state never quite reach the national extremes bodes well for Utah's economy. This holds especially true in the commercial construction industry.

"We continue to have a lot of work that needs to be done. We don't see it slowing down," says Thorn. "It looks like it's going to be strong for a while."

James Wood, director of the Bureau of Economic and Business Research at the University of Utah explains that in 1997, when construction peaked in the state, there was $2.1 billion in permit-authorized non-residential construction. "We were just under that last year [with $2.05 billion]," he says. "We'll probably break [the record] this year."

Contributing toward that record is about $400 million in retail construction of various mall expansions and renovations throughout the Salt Lake Valley. This figure excludes the City Creek project, which is being built by an LDS Church-affiliated entity and which will add two anchor stores and 100 shops and restaurants. (As a matter of policy, the LDS Church does not disclose financial information.) Although it is not known for certain, says Wood, it is possible that the non-residential permits that the Church applies for this year could set the new record in commercial construction all on its own.

"Non-residential commercial [hasn't] had a boom like this in years. They're extremely busy," he says, while adding a caution: "[But] will they be able to fill the buildings with tenants? If you overbuild, the next job might not be around the corner for a while." This warning against overbuilding, even in a booming market, is good advice. Empty buildings, no matter how well constructed, do not lend themselves to future projects.

If the commercial side in general is experiencing record success not seen in years, the excitement is somewhat balanced by the slowing on the residential side of the industry. According to Wood, residential building permits are down over the past three to four years, with permits filed during the first two months of this year down 70 percent over last year in the state's fastest growing cities.

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