Construction momentum in the Spokane area will continue upward next year, industry observers here say.

Andrea Frye, business development manager at Spokane-based Vandervert Construction Inc., says current positive economic indicators, such as continued job growth, below-average unemployment rates, low inflation, and stable energy costs, are key drivers for the construction industry.

Vandervert currently has multiple restaurant, office, and retail projects under construction in the Spokane area, and five hotel projects throughout the Pacific Northwest.

“We’re excited to be entering 2017 in such a strong position, with $51 million in projects already under contract for the new year,” Frye says.

Jonathan Mallahan, director of neighborhood and business services for the city of Spokane, says 2016 has been a strong year in terms of building permit valuations, and he anticipates continued growth in 2017.

The city issued building permits valued at a total of $402 million in the first 11 months of this year, exceeding the permit values for all of 2015 by 23 percent with a month left in 2016.

The city also has projects valued at more than $85 million in plan review, including the proposed $28.9 million Copper River Apartments, in northwest Spokane; the $18 million Gonzaga University Center for Athletic Achievement, in the University District; and the $11.8 million Iron Bridge IV building shell on the eastern edge of the U District.

Mallahan says the city plans to spend $238 million on capital projects in 2017. 

Cheryl Stewart, executive director of Inland Northwest Associated General Contractors, describes 2016 as a great year for construction with overall volumes up over recent years.

“There were a lot of school projects out to bid and city work,” she says. “Next year will be more of the same.”

Stewart says, though, that some members of the trade group are reporting that highway construction has been comparatively quiet in 2016.

“We’re expecting that to change for the next few years,” she says, referring to an expected increase in projects related to the North Spokane Corridor, starting in 2017.

The biggest threat to the current construction momentum is the shrinking skilled workforce, Stewart says.

Joel White, executive officer at the Spokane Home Builders Association, says 2016 has been a year of strong gains in the Spokane area for both single-family and multifamily home construction.

“There’s still momentum at least through the beginning of next year,” he says.

The city of Spokane permitted 344 building permits for single-family homes with a total value of $86 million in the first 11 months of 2016, compared with 384 permits valued at $76.7 million in the year-earlier period.

The city issued building permits for a total of 425 apartment units valued at $46 million through November of this year, up from permits for 354 apartment units valued at $38 million in the year-earlier period.

An increase in mortgage rates and a potential shortage of developed land next year also could affect the current momentum, White cautions.