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Vertical Outlook: Construction

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2005 YTD pages: 31,360.9*

2004 YTD pages: 30,002.8*

% change: 4.53%

*Includes engineering trade titles

Bright spots: Demographic forces continue to fuel construction demand. A Brookings Institution report forecasts that in 2030, about half the buildings in which Americans live, work and shop will have been built after 2000.

Challenges: Costs for building materials continue to increase, which could hamper marketing/advertising outlays. Although the impact of last year's hurricanes will be felt in the Gulf Coast for years to come, it has had little effect on the prospects for the construction industry overall in 2006 and beyond.

`Katrina and Wilma cut short production [but in the aftermath] manufacturers will increase production, so it's a mixed bag," said Niles Crum, publishing director of Reed Business Information's Building & Construction Group.

Several factors continue to favor the construction market, including relatively low interest rates and a pickup in jobs.

Despite the positive indicators, Crum said he expects print ad revenue to be flat in 2006. One reason: Building product manufacturers, frustrated with their ability to influence builders to purchase their products, are investing more of their marketing dollars into consumer publications. Recognizing this trend, Reed last year launched a consumer title, Professional Builder Tips-What the Pros Use.

On the plus side, Crum expects digital revenue to grow a robust 60% this year. The surge will be fueled, in part, by each of Reed's four residential titles in the construction portfolio getting its own Web site.

Reed has entered content agreements with several construction advertisers to sponsor separate sections, including plants/projects and innovation, both in print and online. "Our advertisers want to educate buyers and this gives them a relevant context for their message, which gives them a better ROI," Crum said.

Peter Goldstone, president-magazine division for construction publishing company Hanley Wood, said he expects an 8% to 10% increase in top-line revenue this year. "I'm cautiously optimistic," he said. "The commercial sector is poised for expansion."

-Matthew Schwartz

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