Construction activity continues to be strong throughout most of the country, despite rising oil prices and increases in the prime interest rate, news that bodes well for construction distributors in 2005.

Two particular regions of the country are doing exceptionally well. Las Vegas, for example, continues its booming expansion. Since August 2003, total employment in the Las Vegas area has increased by an impressive 4.7 percent while, at the same time, growth throughout the United States has risen only a lackluster 1.1 percent.

One construction distributor told us recently that if a skilled tradesman moved to Las Vegas in the morning, he could have a job on a construction crew by the afternoon. New hotel projects and a massive residential boom are causing Las Vegas to grow even faster than many had projected. And with housing comes work on new schools, water lines, sewers, utilities, and more business for distributors.

What about pricing? The median price of existing homes in Las Vegas has soared by 52.1 percent compared with the second quarter of 2002. New building permits are almost double the levels they were two years ago, according to Reed Construction Data. Reed also reports that employment in the construction sector has increased by a whopping 9 percent.

Florida, particularly in the Miami area, is also doing well. The cleanup from Hurricanes Frances and Charley is still going on (see news story on p. 9) and has led to a pickup in construction employment and disaster services, according to RCD. RCD also reports that "the steady southbound migration of sun-seeking baby boomers will ensure that housing demand in southern Florida, in general, and in Miami, in particular, will remain strong for the foreseeable future."

Meanwhile, a number of new and large projects are on the drawing boards, particularly in the Atlantic states plus Vermont. That region, RCD says, will keep construction strong because of the relatively solid growth expected in key industries in the area. If there is one downside, new home construction took a dip nationwide in November.

But, overall, construction distributors tell us that they expect 2005 to be a strong year with some reporting that they expect 2006 to be the same. Time will tell.

jkeough@reedbusiness.com