Building permit numbers indicate growth

AUGUSTA – Nonresidential building permits were up 69 percent in the first six months of 2005 when compared to the first half of 2004, with the dollar value of the permits totaling $469 million.

“This has got to be good news,” said Sen. Lynn Bromley, D-South Portland, co-chair of the Legislature’s Business, Research and Economic Development Committee. “If it had been 20 percent or so, I would have expected it, but this is a huge increase.”

Bromley said it shows that Maine’s economy is growing, but she is not sure whether the growth is across the state. Rep. Chris Rector, R-Thomaston, the lead GOP member on the committee agrees.

“I want to look at this data closely,” he said.” I would guess most of it is in southern Maine, but even if it is, it is still good news.”

An analysis of the state’s building permit data indicates the construction is spread across the state from $500 for renovations of a child care facility in Old Town to $19.8 million for construction of the new multicounty jail in Wiscasset.

The numbers of projects are greater in southern Maine, but that is also where the state’s population is centered. Portland had the largest number of projects of any community with 30. Other areas of the state also had large numbers of projects approved with 18 in Augusta, 15 in Bangor, 10 in Lewiston and seven in Presque Isle.

“It verifies what we have been saying,” said Jack Cashman, commissioner of economic and community development. “The economy in Maine is strong, it is diversified, and it is growing.”

He said the fact that so much is being invested in nonresidential construction is an important indicator of how Maine companies and institutions view Maine’s economy. He said major investments are not made if firms believe the economy is in trouble.

“We are growing despite what the naysayers would have you believe,” he said.

Bromley said that while the building permits are good news, she believes there needs to be some research into why various companies and organizations are building or expanding facilities.

“I think we need to talk with these people and find out why they made these investments and highlight what that is to others,” she said. “I have thought that our economy has been chugging along, but this may mean it’s doing better.”

Rector said he would like to believe that, but cautioned that one piece of good news is not enough to say the state is where it should be given the state’s high tax burden and relative low incomes.

Cashman said the building permit data do not reflect the positive news he has seen from small companies that have added two, three or five new workers without the need for a new building or major renovations.

“We have had a loss of manufacturing for years,” he said, “so we have a surplus of facilities that can be used, some with little or no renovations, for manufacturing and other things.”

Cashman said the building permit data are supported by employment numbers from the Department of Labor. He said that despite the job losses from manufacturing jobs, the state has gained in total employment.

“That positive trend goes back years into the King administration,” he said,” and this is the statistic that I like the best. There are more people working in Maine today than at any time in the state’s history.”

According to the Department of Labor, there were 674,000 Mainers working in June. That is up 6,300 over June 2004.

“And they are not all retail and service sector jobs like some would have you believe,” he said.

Cashman pointed to recent decisions by some Maine boat builders to add workers as an example of where manufacturing jobs are being added.

But he acknowledged that the state is under a “black cloud” with the BRAC process that could lead to the closing of military installations in Kittery, Brunswick and Limestone.

“If that happens, we are going to have to invest in ourselves to overcome those losses,” he said.