Construction Sector Booming

When EDS, the leading global technology services provider, announced plans to expand its Service Management Center in Tulsa, the company said the project would more than double the square footage of the data center to 440,000 SF.
The project is an example of the mushrooming construction business across Oklahoma, said Dick Anderson, executive vice president of the Associated General Contractors of Oklahoma.
The EDS facility, one of the nation’s premier data centers, has 76,000 SF of raised floor space, and the expansion will bring the square footage up to about 156,000 SF. EDS is expected to begin construction in the third quarter with completion targeted for 2009.
Opened in 2003, the data center supports commercial and public sector clients and is designed to withstand and continue operations during a natural disaster or man-made incident.

Historic Activity
“There is more construction going on in the marketplace than at anytime in state history,” Anderson said.
Over the past century, “normal” construction is about 4 percent of the state Gross Domestic Product. Oklahoma had the fourth fastest growing GDP in the nation from 2005 to 2006. In 2006 Oklahoma’s GDP was $105.7 billion, a 6.7 percent increase over 2005.
Within the last five years, construction has equaled 6 percent of the state’s GDP — or $7 billion, Anderson said.
The construction sector is the only goods-producing sector across the U.S. in which employment is projected to grow, according to the U.S. Department of Labor – Bureau of Labor Statistics. In its “State of the Construction Industry 2002–2012,” the bureau reported that nearly one out of seven new non-farming jobs were in construction.
The marketplace is just stellar, Anderson said. “And, it will stay that way for the next three years at least.”

Big Money Jobs
“In the past — even in the last five years — a big job in the building industry was a $10 million job,” Anderson said. “Now, we are seeing $50 million, $70 million and $100 million jobs.”
The EDS center will be a $150 million project. A U.S. Postal distribution center in Norman will also be a $150 million facility. PepsiCo will invest $180 million to construct a manufacturing and distribution facility in Pryor. Construction of the 1.5 million-SF Gatorade plant will create 280 jobs.
There are millions of dollars invested between the University of Oklahoma and Oklahoma State University. In Stillwater, construction of academic and sports complexes at OSU is worth $250 million.
The quality of construction projects is improving. North of Norman, the 585-acre University North Park is used for commercial and mixed use.
In Tulsa, the BOk Center is a $180 million project. Another $282 million worth of work is being considered along the Arkansas River.

Costs Go Up
The cost of copper, steel, drywall, oil and concrete has hiked project prices.
“Everything oil touches — from the carpet on up — are oil-based materials,” Anderson said. Concrete, at $90 a yard, is 80 percent above what it cost 10 years ago.
While material costs are soaring, Anderson said inflation is not that much of a factor.
“There have been spikes in some materials, others are leveling,” he said. “If your budget is more than two years old, you are 15 percent out of the money already,” he said.
Anderson sees the influx of private and public dollars fueling continued growth. ?



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