Construction report has weak foundation Public-sector permits lone strong area

September 24, 1991|By David Conn

A report on planned Baltimore area construction activity in August contains some of the worst numbers since the recession of 1982, and leaves the building trades still waiting for the construction-led rebound that some local economists have predicted.

A positive note in the report from the Baltimore Regional Council of Governments is that the number of residential and non-residential construction permits increased last month, compared with August of 1990.

But most of last month's construction permits, an important indicator of future economic activity, were issued to the public sector. And experts said the numbers in 1990 were so bad that the slight relative improvement this year doesn't mean much at all.

The report showed, for instance, that 11 percent more residential housing permits were issued last month than during August 1990 in Baltimore and the five surrounding counties. But that rebound only touched the single-family home market, the regional council said.

Further, the single-family increase was boosted by the 120-unit Nehemiah Project in the Sandtown-Winchester area of West Baltimore. The project for low-income residents was subsidized partly by the federal government.

Multifamily housing projects took a sharp dive in August compared with last year, the regional council reported. Where 300 multifamily units were authorized in August 1990, only 76 were issued last month, the lowest level of activity in that category in more than 11 years.

Non-residential building activity was likewise depressed, the report shows. Although the $29 million in non-residential permits issued in August was 43 percent higher than a year ago, three-quarters of last month's total was institutional -- religious, educational and medical buildings. And nearly half came from two planned elementary schools, according to Mark Goldstein, an economist with the council.

"We're still kind of continuing along in the recessionary mode," Mr. Goldstein said.

He noted that positive comparisons between last month and a year ago mean very little since August 1990 was one of the worst months for building activity because of Iraq's invasion of Kuwait.

A comparison of year-to-date building activity shows that 1991 is shaping up to be a dismal year for the construction industry. The council's report shows that from January through August the region had an increase in only one out of nine building categories, the value of additions, alterations and repairs to non-residential buildings.

The brightest hope for area construction companies may be the prospect of dramatically higher school enrollment in the area. Howard County alone plans to build 13 schools during the next eight years, Mr. Goldstein said.

"It's damn good news for construction companies," he said. "It's probably saving a lot of people's necks that this activity is going ahead."

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