New hospitals, resorts and power plants are driving a building boom across the country and in Utah, according to an economist with the Associated General Contractors of America.

The surge in commercial and industrial building is welcome news as the nation's residential housing sector begins to stumble, according to Ken Simonson, chief economist with the contractors group, which held its annual meeting Thursday in Salt Lake City.

"Obviously, if a subdivision isn't built, then you don't need the local gas station or grocery store or strip mall," Simonson said. "You also get a little less activity in terms of new schools, roads, sewer and water hook-ups and maybe less public services like fire and police stations and libraries."

But Simonson said the U.S. housing slowdown will do little to break the momentum in commercial and industrial building through 2007.

Utah's population growth to 2.6 million people as of July 1, 2006, was in large part due to a record 52,368 births, according to a state economic report.

"The birth rate in Utah is about 40 percent higher than the national birth rate," Simonson said. "Those are very favorable indicators for residential construction, school construction, a variety of public services and also for some kinds of retail and other consumer-oriented construction."

Nationally, Simonson said, employment in residential construction in 2006 dropped 3 percent, but nonresidential construction employment rose 3 percent.

In 2006, Utah had the strongest construction employment growth — at 17 percent — of all states. Nationally, construction employment in 2006 grew at only 0.5 percent.

Steven Bogden, national director of business development for Coldwell Banker Commercial NRT in Holladay, points to the IHC Intermountain Medical Center in Murray and downtown's City Creek Center renovation — both developments represent nearly $2 billion in capital expenditures.

"That resonates through the community," Bogden said. "People will hear about this — architects, engineers and retailers — and will come here and say, 'You can't believe what's going on in Salt Lake City.' You will get clients that will come downtown and say they want to be a part of this. It's an incredible circumstance we are in right now."

But the boom is not without problems. Simonson said the state in 2007 likely will continue to see a shortage of asphalt. In addition, Simonson said, Utah is falling behind in building new roads.

"You can't rely indefinitely on the gas tax," Simonson said. "At a time of high gasoline prices we are seeing more conservation by motorists, and as a result the funding for highway projects is falling short."

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