Denver sometimes feels like a city where everything is under construction. If you look around at the cranes and at the actual numbers, that’s not that far out of an impression.
In 2018, the region notched another record year for building: $9.4 billion in new Denver construction projects, according to the latest numbers from Dodge Data & Analytics. The Mile High City just keeps building and building, and surprising the experts.
Ken Schroeppel, an assistant professor at the College of Architecture and Planning at the University of Colorado Denver expected things to slow, but “here we are, about eight years into an economic expansion, and things are going well.”
Schroeppel, the man behind the DenverInfill blog which tracks development in and around downtown, said new Denver construction projects have been a nice mix of building types. Downtown will soon add 6,202 residential units, 1,371,000 square feet of office space, and 929 hotel rooms.
The boom can’t last forever though.
Richard Branch, an economist at Dodge Data & Analytics, said building has started to slow in many cities around the country, and he predicts Denver will soon follow. Over the next year and a half to two years, Branch expects a “gradual pulling back.”
In fact, Branch said the overall numbers hide a slowdown already underway. If you remove construction projects at Denver International Airport, metro Denver construction starts would have been down in 2018 instead of breaking records. The Denver construction labor force has also started to contract according to labor data, shedding about 3,000 jobs since summer.
If there is a recession, commercial development would drop off even more sharply. Which illustrates precisely the kind of difference government-funded projects can make. There is billions of dollars in civic construction on the books that could help the region weather a possible recession. The biggest of these projects include the great hall redesign and gate expansion at DIA, the new Central 70 lanes on I-70 and the redevelopment of the Stock Show complex.
“Denver will be in a pretty nice position where those public projects can help kind of keep things moving and keep people employed,” Schroeppel said.
For now, Denver construction companies are still busy, so if there was a slowdown most people might not notice at first. Skilled labor shortages stretch out the time construction takes and projects that started years ago are still underway. Branch said there’s “probably a lot of cranes still working, probably a lot of scaffolding, but in terms of new activity, I think we’ve started to see a pull back there.”
His prediction is that newly started construction in the Denver area will slow 12 percent in 2019. That’s still $8.5 billion in projects.
“Still a really, really good year,” Branch quipped — just not a record.