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‘98 construction may not stay on par with building boom of ’97

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The dollar value of new construction in Utah reached an all-time high during the first quarter of 1998, paced by large commercial projects and apartment construction.

But economists at the University of Utah's Bureau of Economic and Business Research cautioned that despite the record-setting quarter, the construction boom appears to be slowing."Without some very large projects, it is extremely unlikely that the nonresidential sector can match last year's record high of $1.3 billion," said James A. Wood, the bureau's senior research analyst.

The bureau, which publishes a quarterly construction report, measures construction growth by the value of permit-authorized residential and commercial construction.

From January through March, the total value for new residential construction, new nonresidential construction, additions and repairs was $851.4 million, about $180 million more than the previous high in 1996.

In nonresidential construction, the $413.9 million in value and the 4,126 in authorized dwelling units were above the same quarter in 1997.

Increasing apartment construction provided much of the growth. The number of authorized apartments more than doubled in the first period this year to 541 with a total valuation of $32.5 million, compared to $10.4 million during the same period last year.

Meanwhile, single-family home construction permits in the first three months of this year dropped 9 percent compared to the first quarter of 1997.

Wood said home building declined in 16 of Utah's 29 counties, while the most significant exceptions were Washington and Utah counties, which recorded home construction permits up 6.9 percent and 9.2 percent, respectively.

In commercial construction, valuation in the first quarter of 1998 reached $323 million, which was $147 million more than the previous first-quarter high for nonresidential construction, set in 1995.

Three large projects pushed the value to a record level: Larry Miller's $85 million Jordan Commons office retail complex in Sandy, a $65.2 million permit for the 2,088-bed Salt Lake County Adult Detention Facility and a $28 million expansion of IHC's Utah Valley Regional Medical Center.

But Wood said the first quarter of 1998 also marked the end of the boom in commercial construction.

"While there are a few sizable projects ahead in 1998 . . . there does not appear to be a sufficient number of multimillion dollar projects to lift valuation beyond the $1.3 billion of 1997," Wood said.