Construction activity within the Upper Valley remains strong as we enter into 2006. While it may be difficult to predict overall growth for the year ahead, it is easier to forecast continued momentum in certain segments, including residential and commercial building. Local real estate developers and investors surely appreciate what the U.S. Census Bureau research indicates; places like Lebanon and Hanover possess a number of key demographics and economic characteristics that make them attractive for high-technology based entrepreneurship and venture investing. Additionally, there is a well-documented need for residential housing units throughout the Upper Valley.

I suspect that for many industry participants, 2005 was a very productive year, but in terms of volume, closer to historic averages. The general economy has been quite robust for a few years now. For some, the moderate pace of business activity in 2005 may be the result of processes associated with the permit/building approval process. Preconstruction planning for many of today’s sophisticated building projects can be quite demanding and time consuming. Subsequent delay in a building schedule is not unusual; particularly for work involving federal or state funding. While contractors pursue steps to help clients alleviate preconstruction challenges, they may recognize a need to redeploy their assigned project personnel as a result of the delays. During this Preconstruction period, companies with broad resources, work experience and skilled personnel may become engaged in separate building activity, perhaps meeting smaller-scale project requirements of residential and commercial customers. Anyone who has tried to hire a tradesperson during the last few years can attest to the fact that such individuals are ‘as busy as they want to be.’

What is in the construction pipeline for local participants? A number of larger residential projects have moved through the preconstruction channel and are ready to move into the construction phase. Multi-family, assisted-living/retirement, and custom home construction projects will soon dot the local landscape. Where the scale and volume of residential projects is increasing, we are likely to see commercial building activity continue, but to a lesser extent. Renovation work is likely to increase within both residential and commercial arenas.

We expect that institutional building construction will remain steady in the year ahead, including school construction and renovation, and municipal projects (such as maintenance garages, public safety facilities and administrative offices).

As we enter 2006, the availability of general labor is less of an issue. But a lack of available skilled labor is still a concern. Many contractors, with the help of groups like Associated Builders and Contractors and Associated General Contractors, continue to offer training programs. Unfortunately, as experienced personnel are lost to retirement, the industry suffers.

The good news is that building activity within the Upper Valley is expected to remain vibrant through 2006. Future requirements for housing and commercial space will likely continue to increase at a healthy pace, bridled by the appropriate demands of sound planning and zoning considerations.