University Report

Higher education construction spending is currently 18% higher than a year ago, but the year-to-year gain will slide down to near 10% for most of 2008-09. Public higher education spending increased 13% during the last year, while private spending jumped 29%, mostly for classrooms and residence halls.

The value of construction starts has declined from the peak level last summer with no pickup expected by the end of 2009. Total education construction starts increased 8% in 2006 and 5% in 2007, but will drop 20% this year and stay at the 2008 level through 2009. State budget reserves for funding university construction weakened from excellent to average earlier this year and will slip to sub-par in 2009. This is a much milder drop in funding availability than the dip that occurred in 2002-03. Similarly, the investment earnings of private universities have weakened substantially in the slow economy. The era of huge gains in hedge funds has passed.