Infrastructure Spending at Universities Begins Recovery from Sluggish Economy

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Researched by Industrial Info Resources (Sugar Land, Texas)--Over the past two years, infrastructure spending at universities in the United States has taken a hit because of the sluggish economy. With their reliance on private donations to augment budgets, universities have found the last two years to be difficult. During the recession, donations waned, and seeking funds from state coffers was an exercise in futility. However, as the overall economic situation has improved, universities have been able to bounce back, and spending on infrastructure-related projects is once again beginning to flourish.

Industrial Info is currently tracking 90 university infrastructure capital and maintenance projects that will begin construction in the near future in the U.S. The projects are worth a combined $1.1 billion. During the first eight months of 2010, 61 projects worth $352 million have already begun construction, and an additional 28 projects worth $567 million are expected to begin construction activities in the last four months of the year. This is a significant improvement over the annual spending of the past two years.

In 2008, U.S. universities invested $600 million in infrastructure-related projects. During 2009, this amount dropped to $560 million. Now that the economy is recovering, additional funding has once again become more readily available, and universities are taking advantage of the situation as best they can.

Even with rising tuition rates, it is often difficult for universities to maintain the pace of infrastructure improvement that is necessary for a university to operate efficiently. Adding boilers, chillers, electrical distribution systems or steam and chilled water distribution systems are not sexy projects that are visible to donors. Mostly, these projects occur behind the scenes, and this can make them more difficult to finance than new dorms or classrooms. But this type of work is extremely vital to the operation of the university, and must be accomplished.

Some of the key projects expected to begin construction in the coming months are a $250 million heating plant biomass addition in Wisconsin, an $80 million, 20-megawatt (MW) combined-cycle unit addition in Iowa, an $81 million central utility plant expansion in Texas, and a $41 million regional chilled water plant addition in Ohio. Much of the activity in the coming months will occur in the Great Lakes region of the country, but the Southwest and the Midwest will also see some significant university infrastructure project activity.

As the economy continues to recover, university infrastructure spending should continue to increase. Almost $500 million in projects are already planned for 2011, an amount that should only increase as the year develops. While many of the necessary infrastructure projects that universities perform each year are smaller in nature, significant work at a central plant, replacing boilers and chillers, or the addition of a new satellite chilled water or steam plant can be a significant investment for any university. As with the young minds that universities mold and shape, the future looks bright for spending at universities and should only continue to increase.

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