California Construction Down

February 14, 2002

La Jolla, CA--Construction activity in California declined last year, a result of the slowdown in economic growth and caution among builders and their sources of financing.

Builders received $20.4 billion in funding for construction projects last year. That was down 13.1 percent from 23.5 billion for 2000, according to DataQuick Information Systems.

The 2000 total had been the highest since $32.0 billion was made available to developers in 1990. Last decade's low point was in 1993 when $6.9 billion was provided in construction financing.

"We know now that the real estate market has continued to do well despite a slower economic growth rate. Builders are selling just about everything they're putting on the market, but they didn't know the market sould stay this strong when they did their planning. There's a good chance building activity will pick back up this year," said Mike Ela, DataQuick president.

"These construction dollars get pumped right into the local economy in the form of job payroll and building supply purchasing," he said.

The drop-off in building activity was most noticeable in the Bay Area where funding last year totaled $4.5 billion, down 28.4 percent from a record $6.3 billion the year before. The Inland Empire counties of Riverside and San Bernardino saw increases last year, as did San Luis Obispo County.

DataQuick monitors all real estate activity in California and other states and provides information to consumers, lending institutions, title companies and industry analysts. The numbers include all construction loans, commercial as well as residential. A construction loan is typically recorded a few days before building activity actually begins.

Wells Fargo edged past Bank of America to lead the state in providing construction financing. The third most active lender was City National Bank, DataQuick reported.

Media Inquiries: John Karevoll (909)867-9534

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