Construction spending through much of region expected to increase

Construction spending in most sectors throughout the region is expected to steadily rise over the next five years.

A combination of confidence, low interest rates, strong balance sheets, pent-up demand and demographics has helped propel one of the most robust construction markets Philadelphia and its metropolitan area have experienced in a generation. Some other factors, such as public-private partnerships that governments are increasingly turning to improve infrastructure also play a role, said Doug Wheeler of insurer Aon’s Philadelphia office.

PennDOT, for example, has a “Rapid Bridge Replacement Project” which it will put up for bid and select a private contractor to oversee the repairs of 4,500 bridges across the state and also maintain them. Eighteen percent of the state’s bridges have been deemed structurally deficient compared with a national average of 7.3 percent. While that could bring in a large national or international company to win the contract, local labor would complete the work, Wheeler said.

Residential building will receive the most dollars over the next five years and $6.82 billion will be spent in 2019, with education coming in at $3.67 billion and commercial construction following at $2.84 billion, according to Aon’s data. Total construction for this year in the region will be $15.8 billion and climbing to an estimated $21.5 billion by 2019.

Source: Philadelphia Business Journal