Commercial construction in the Inland Northwest is likely to slow somewhat in 2009, and no significant improvement is expected in the already lagging residential-construction sector until the second half of the year at the earliest, industry observers here say.

While 2008 has been a relatively high-volume year for commercial construction here, projects in the city of Spokane's plan-review stage are starting to thin out, says Joe Wizner, the city's building official.

Kate McCaslin, president and CEO of the Inland Pacific Chapter of Associated Builders & Contractors, also says projects in the pipeline are starting to slow, although she predicts the Inland Northwest probably won't be hurt as badly by a construction slowdown as most of the country.

McCaslin says most commercial contractors have a solid backlog of work scheduled through the first quarter of 2009.

Meanwhile, residential construction probably will start slowly in 2009, and because of the current economic recession, most home builders will be reluctant to build on speculation, says Joel White, executive officer with the Spokane Home Builders Association.

Values of building permits issued through the first 11 months of 2008 in Spokane County and the cities of Spokane and Spokane Valley totaled $687.9 million, down less than 0.1 percent from the year-earlier period.

This year's permit values were bolstered largely by nonresidential construction, as building permit values for single-family residences in the three jurisdictions fell 41.5 percent from the year-earlier period, to $154.8 million.

Looking ahead, projects valued at more than $21 million currently are under plan review at the city of Spokane, Wizner says.

That's still less than half of the value of projects in that stage of the pipeline going into the winters of 2006 and 2007.

The largest project currently under plan review is the $9.2 million, 115-room Best Western Peppertree Hotel proposed at the northwest corner of Division Street and Third Avenue.

While no one is predicting that nonresidential construction in 2009 will match its pace in 2008, Wizner says some significant public works projects in the preliminary planning stages now might be ready for building permits later in the year.

"The biggest project on the horizon is the wastewater treatment plant planned at the stockyards," he says. Spokane County is planning a $115 million facility at that site near Freya Street and Trent Avenue.

Meanwhile, Community Colleges of Spokane is planning to start six projects in 2009 with total value estimated at $98 million.

If voters within Spokane Public Schools District 81 approve a proposed $288 million facility and technology improvement bond in March, it's possible that the district could start some of those in late 2009, although it's more likely it will start the projects in 2010, Wizner says. The bond, along with an additional anticipated $44 million in matching state money, would fund replacements or renovations of Ferris High School and four elementary schools over about six years.

Some projects in the planned $175 million, five-year expansion at Sacred Heart Medical Center, also might begin in 2009, Wizner says.

In the biggest ongoing transportation project, local legislators and the Washington state Department of Transportation plan to ask the Legislature for $38 million to fund the next phase of the North Spokane Corridor freeway project.

Nationwide, Associated Building Contractors is predicting a decrease in commercial construction volume of 10 percent to 20 percent in 2009, and a greater rate of decline for certain subsectors such as lodging, office, and manufacturing facilities. McCaslin, however, doesn't feel the commercial-construction volume here will fall quite that far.

"I think we've been pretty insulated," she says. "Construction has held up in the Northwest, particularly here."

In the home-building sector, Bruce Georgen, president of Georgen Homes Inc., of Spokane, says he expects a slow recovery to begin in the spring, and to extend into 2010.

Georgen anticipates building 12 to 15 homes in 2009. Georgen Homes usually builds 20 to 30 homes a year priced in the $240,000 to $400,000 range, but this year completed only 16 homes.

He estimates that prices for new homes will be 5 percent to 10 percent below what they were for comparable houses in 2006.

"Our last five or six houses were sold almost at cost just to trim the inventory, make new starts, and keep guys working," Georgen says.