Reed Construction Data announced today that the volume of nonresidential building construction is expected to expand in the next twelve months. This is based on the RCD/RSMeans Commercial Construction Expansion Index calculated from Reed’s proprietary database.

The RCD/RSMeans Expansion Index is a one-year “look ahead”; at the construction marketplace at the local market level. It indicates whether a location’s construction volume is projected to expand or shrink in the upcoming twelve months. 

The Expansion Index is based on actual construction project data — projects currently in planning and projects currently under construction. The Index is updated monthly, giving a rolling twelve-month prediction of the marketplace. The Expansion Index can be calculated by market sector, such as hotel, retail or hospital, as well as for geographical areas down to the city/MSA (metropolitan statistical area) level.

San Francisco and Los Angeles are the only large metro areas among the twenty five cities with high expansion indexes. Expansion indexes for each of the 361 US metro areas are available on an interactive map at RCD Commercial Construction Expansion Index. Smaller metro areas expected to see strong pickups in nonresidential construction activity in 2010 include Fresno, Syracuse, Daytona Beach, Topeka, Battle Creek, Blacksburg, VA, and Rochester, MN.

Nationally, retail construction (2.83) has the highest expansion index. The expansion index for the Hospital (0.93) market suggests nearly steady construction activity in 2010. The 1.20 expansion index for education suggests slightly increased activity in 2010. Trends in Expansion Indexes and Indexes by specific project types are available from Reed Construction Data at RCD/RSMeans Predictive Analytics.

Expected construction activity in the next twelve months is calculated by analyzing the full project planning pipeline database to remove projects explicitly on hold, projects effectively on hold because there has been no recent action to move the development process forward from concept to bidding and projects too early in the development process to begin construction within a year.

The value of projects currently under construction is calculated by projecting the completion date from recent historical activity using the RSMeans cost and productivity data and Census Bureau estimates of how long each type of project takes to complete.