No ups and downs in the Midwest, just flatness, in its landscape and its outlook for construction.

Illinois, Indiana and Wisconsin are expected to have $44.8 billion in construction starts in 2005, according to projections from McGraw-Hill Construction. That is essentially unchanged from the $44.9 billion in starts anticipated to close out 2004.

But a downturn in single-family housing will dampen activity, and other residential, nonresidential and infrastructure construction will be flat but not decline.

advertisement

"I would say the local market is strong and steady," added Richard Tilghman, senior vice president of Chicago-based Pepper Construction Group. "I don't see any huge uptick, but I don't see a downtick."

Offsetting economic indicators might help spell out why the forecast is middling, Coskren said.

Stimulating the economy are the lending encouraged by the Federal Reserve's low interest rates, the tax cuts that President George Bush has pushed and government spending on the Iraq war and homeland defense.

On the downside, hiring is down in part because of out-of-control health care costs, oil prices are gushing and the federal deficit is "enormous," Coskren said.

A Strong 2004

Contrary to this outlook, 2004 in the Midwest was expected to finish with robust growth.

Data show that 2004 was expected to end with a healthy 7.4 percent increase in starts over 2003's $41.8 billion.

Wisconsin's 11 percent increase was likely the biggest in the region. Data show starts went from $10.1 billion in 2003 to an expected $11.1 billion in 2004.

Driving the growth was the beginning of the $7 billion Power the Future project, which involved upgrades to the Port Washington Generating Station.

Improvements are to come to the Oak Creek Generating Station as part of the project.

Also adding fuel was the start of the nearly $1 billion reconstruction of the Marquette Interchange in downtown Milwaukee. The project entails the rebuilding of 26 mi. of mainline roadway and 9 mi. of ramps.

Fittingly, the Wisconsin Department of Workforce Development recently released a report that predicted vigorous job growth in construction in the Badger State. It said that between 2002 and 2012, specialty trade contractors are anticipated to add 18,960 jobs, a 23.8 percent increase, and general contractors 5,610 jobs, an 18.1 percent increase.

Illinois was also expected to have a strong wrap for 2004.

Data show the state will end the year with $20.8 million in starts, a 9 percent increase from 2003's $19.1 billion.

Several projects fed the increase, including the $850 million expansion of the McCormick Place Convention Center in Chicago, the $564 million Olmstead Dam project in the south and the $502 million Prentice Women's Hospital and Maternity Center on Northwestern University's Loop campus.

The University of Illinois Flash Index rose in October, the most recent reading, to 102.6 points from 102.2 in September. A reading above 100 indicates economic growth, and one below 100 shows contraction. The individual- and corporate-tax components were up in inflation-adjusted terms from the same month a year ago, while sales-tax receipts were virtually unchanged.

Indiana was expected to increase 2 percent in 2004, with an anticipated $13.0 billion in starts.

Hustling Hoosiers

Projections suggest Indiana will be the only state in the region to see an increase in starts in 2005.

Data project that Indiana will have $13.5 billion in starts in 2005, a 4 percent increase from 2004.

"Indiana has seen steady growth for a number of years," said Richard Palmer, executive director of the Indianapolis-based Associated General Contractors of Indiana. "I think that will still be the case in the coming year."

A couple of ongoing projects are fueling the surge, including the approximately $1 billion expansion of Indianapolis International Airport, which is expected to last through 2008. Another enterprise with a major impact is the $832 million in capital improvements in the Indianapolis Public Schools system, a project expected to last through 2011.

In Indianapolis through third-quarter 2004, the city flexed its muscles in life sciences research, a traditional stronghold.

Starts in institutional laboratories shot up in part because of the $46 million
State of Indiana Forensic and Life Sciences Laboratories on 16th Street and the $42 million Indiana University School of Medicine Information Sciences Building on 10th Street.

A related area, manufactured-owned laboratories, is also upbeat mostly because of Eli Lilly and Co.'s $200 million Biotechnology Research and Development Laboratory. Seven other Lilly projects are still under construction.

"The state is trying to marshal what is termed the 'Life Sciences Corridor,' which stretches from Lafayette, through Indianapolis and into Bloomington," Palmer added. And, the state intends to increase its share of this lucrative market with BioCrossroads, a public-private effort to boost investment in the life sciences.

As Indiana increasingly offers high-paying research jobs, it will experience growth in residential construction, which is expected to surge 13 percent, to $7.5 billion, in 2005.

One of the major starts in Indianapolis through third-quarter 2004 was the $175 million Residences at Market Square, which will bring 417 condominiums to downtown.

Land of Lincoln's Levels

Wisconsin's Outlook

Total construction starts in 2005 are projected to rise in Indiana but fall in Illinois and Wisconsin.

Through third-quarter 2004, Chicago is seeing a big increase in starts partly because of the McCormick Place Convention Center expansion.