Ken Simonson, chief economist of the Associated General Contractors of America in Arlington, VA, says that it is safe to extrapolate that the numbers for the Washington, DC area, when they are released on May 19, will reflect similar growth and will likely exceed the national average. He points to March's year-on-year growth statistics for the area, which showed an increase of 4.9% over March 2005.

The big news--at least for the DC development community--is that wages, though growing at a steady moderate pace of 3%, have not pushed up construction and developments costs to any significant degree, Simonson and others say. Labor costs typically make up between 40% to 50% of a commercial project, explains David Dempsey, managing director of Spaulding & Slye Construction here. Right now, Dempsey says, "we don't hear our subcontractors talking that much about wages." The steady pace of employment wages is fortunate, he adds, because "with the cost of materials and rising energy costs, if labor costs took off it would really impact the market."

Even the white collar side of the business--the side with which Dempsey is most familiar--has steadily grown by 10% to 15% over the last year, resulting in a shortage of mid-management talent. Here, he says, there is definitely an increase on wages, but not a stratospheric one. "The market feels stable. You don't get the sense that people are jumping around for a 25% increase in compensation. They are holding on to what they have."