U.S. Census Bureau Report Shows Dip in Government Correctional Construction

WASHINGTON — Recent figures from the latest U.S. Census Bureau on the annual rate of construction spending indicate that the country’s state and local governments are on track to spend more than $275 billion on nonresidential, taxpayer-funded construction initiatives this year, with highway and street ($93.5 billion), education ($72.5 billion) and transportation projects ($31.7 billion) together comprising the bulk of funds.

The report also shows correctional construction declined the most of all other major spending categories over the last decade, from an $8 billion zenith in November 2008 to the current amount of $4.6 billion, though falloff is probably partially tied to the rising trend of prison and jail privatization.

Several reports also indicate commercial and government construction spending will begin to slow starting in late 2019 or early 2020 due to higher interest rates, increasing material costs and nagging labor shortages. In addition to these economic factors, public sentiment, new sentencing guidelines, lower incarceration rates and prison population declines may have an impact on corrections construction spending during this period.

While most architects and construction executives would agree that today’s correction construction market is not the boom of 2006-2009, it has still remained consistent and healthy since 2014.

Is the corrections market overbuilt?

“Studies have identified up to 200,000 replacement beds are required over the next few years to replace aging federal, state and county facilities,” said Joe McKenna, a business development manager with Oldcast Precast National Products. “Major jail and prison projects are on the horizon. Large construction projects such as the Alabama State Prison Program, Marion County (Indianapolis) Justice Complex, Utah State Correctional Facility, Wayne County (Detroit) Jail, Los Angeles County Jail and the Federal Bureau of Prisons Letcher County Kentucky should continue to fuel construction spending. Many smaller and medium-size counties are also considering replacing their outdated buildings with better-designed and technologically advanced facilities.”

McKenna added that depending on the outcome of the 2020 United States Presidential election, Immigration and Customs Enforcement (ICE) policy may stimulate new private prison construction through 2024.