PAGE 2 – February/March 2009 – The Charlotte/Triangle/Triad Construction News
NC Contractors Focus on Managing
Construction’s Economic Crisis
Associates of NC is bullish on military pro- slacking as both China and India slow their
ELLISON CLARY – The Charlotte/Triangle/Triad Construction News
jects. Angell is director of federal activities construction initiatives. Production plants
North Carolina’s construction industry Raleigh office of general contractor Bras-
for the engineering consulting firm that pro- are shutting down, bringing more balance to
faces its toughest economic challenge since field & Gorrie, understands the need for in-
vides environmental services such as wet- demand and supply.
the Great Depression, some say. Most agree novation. Commercial building is “slow and
land migration and stream restoration. Based But Duckworth fears a confidence crisis.
2009 will be hard and they worry about cautious for 2009,” he says and adds, “most
in Maryland, it employs 100 in Raleigh. “People’s portfolios have lost value,” he
2010, too. of our 2009 work is already booked or under
“We see probably a record year in mili- says. “People need to want to invest money
Residential housing is moribund, com- construction.”
tary construction dollars, especially in North again. The banks have got to get comfort-
mercial is struggling and financing is diffi- One such project is the Wake Medical
Carolina with Fort Bragg and Camp Lejeune able lending money so that infusion can
cult, construction professionals and Tower and associated parking deck that to-
and the other Marine Corps bases,” Angell trickle down to construction projects.”
economists agree. gether make up a $73 million development.
says, citing a huge Army consolidation and It will take more than a trickle to fix the
“The numbers are rather ugly,” says Dr
current economic mess, says Tony Plath, as-
. That helps keep the 150-employee office
the Marines’ “Grow the Force” program.
Mike Walden, economist and William Neal humming.
Money is flowing for renovations and ad- sociate professor of Finance at the Univer-
Reynolds professor at North Carolina State “I think 2010 is anybody’s guess,” Duck-
ditions to Veterans Administration facilities, sity of North Carolina at Charlotte.
University. “The recession really started in worth says.
too, he says, and the Homeland Security Of- “I’ve never seen anything like this,” says
the construction industry, specifically resi- Offering assent is Eric Reichard, chief
fice will invest in Coast Guard facilities like the 30-year banking teacher. “All that’s pre-
dential housing.” operations officer of Rodgers Builders of
the one in Elizabeth City. venting this from being a second Great De-
Walden sees some light for residential Charlotte. He admits that some projects are
He thinks the military could spend more pression is that the government has
construction in 2009, predicting “an im- getting pushed farther out but is optimistic
than $3 billion on Tar Heel construction in intervened massively, and we’re still not at
provement off a very low base.” that they will be built.
2009. the bottom yet.”
Less optimistic is Robert Coon, surety Helping Rodgers short-term will be a
But it still isn’t easy to get military work, Platt supports President Obama’s efforts
manager for Scott Insurance in Greensboro. five-floor, 15,000 sq. ft. classroom facility
Angell says, especially since projects are to create a stimulus package. He hopes Con-
“I don’t see anything in ’09 to help resi- for the University of North Carolina at Char
growing larger. gress will budget nearsly a trillion dollars for
-
dential,” he says flatly
A winning strategy for medium-sized infrastructure repair, new construction and
. lotte in center city Charlotte valued at $46
Apartments might be an exception, he million. It’s planned for a spring start.
companies is to form mentor-protégée part- tax relief for the states and small busi-
adds, but they’re typically built by commer
nerships. That worked for female-owned ness.This would spur bank lending that has
- Rodgers employs about 350 and Re-
cial contractors who face their own down- ichard focuses on keeping everyone busy
Military and Federal Construction and lagged even with huge liquidity injections
.
turn. “We’re trying to give all our employees the
Humphrey Mechanical, a unit of Pro Con- from the federal Troubled Assets Relief Pro-
“The construction industry is facing a best training we can,” he says. “And we’re
struction. Their Team Construction joint gram.
double dip – banks aren’t lending and mu- streamlining our processes so we can be
venture based in Jacksonville, NC, won a $6 With quick action, funds will start reach-
nicipal bonds aren’t selling,” Coon says. ready when we start coming out of this.”
million Marine Corps fire station in Beau- ing into the economy by the end of the first
“Most contractors should be getting a Much more optimistic is Keith Pehl,
fort, SC, that KCI designed. quarter, Plath reckons. Although 2009 would
plan together,” Coon advises. president of Optima Engineering in Char
In Raleigh, the good news includes pro- still be a down year, 2010 could return the
-
A business plan for hard times keeps lotte. “For us, 2008 was our best year,” he
jects underway in downtown, says Ken economy to positive territory.
tough decisions from being emotional and says. “I think 2009 is going to be almost as
Atkins, executive director of Wake County To Walden at NC State, a public works
outlines necessary steps to reduce expenses good except in certain market segments.” He
Economic Development, a division of the plan makes sense, but he likes one in the
and ride out the downturn, he explains. names retail and residential.
Raleigh Chamber of Commerce. He men- $150 billion range, adding that such a pro-
To ease funding woes, the John S. Clark Pehl sees strength in education, hotels
tions the more than 120,000-square-foot L gram won’t, by itself, end the recession.
Company of Mt. Airy is working with and in healthcare, because of strong popula-
Building that will wrap a new Wake County “Recessions are self-correcting,” Walden
lenders to help project owners find financ- tion growth coupled with an aging society
parking deck with offices and retail. says.
.
ing, Greg Marshall, the company’s chief fi- Energy-related work also keeps him busy
Healthcare is strong, with both WakeMed As prices fall for assets, commodities and
.
nancial officer, told those attending the Optima just moved into new offices that
Health and Rex Healthcare developing labor, he points out, their costs become more
Construction Financial Management Asso- sport myriad green concepts and Pehl says
major projects and Duke Hospital Systems affordable.
ciation’s Carolinas Construction Conference he’s looking to add two more engineers to
planning an expansion, Atkins says. “Entrepreneurs look at bargains and
in Greensboro this Fall. his workforce of 38.
“We don’t feel the construction hit quite begin buying – stocks, land, structures and
Scott Duckworth, vice president in the Back in the Triangle, Joe Angell of KCI
as heavily here because of our particular equipment – and they hire labor,” he ex-
blend of public-private and our technology plains. “That’s fundamentally what will
base,” he says. A recent network news report bring us out of the recession. It takes indi-
pinpointed the Triangle as the second most vidual, private decisions that now is the time
likely population center, behind only Las to jump back into the economy and buy and
Vegas, to exit the downturn with strong mo- expand.”
mentum, he adds. Reichard of Rodgers Builders can appre-
A bright spot, say Angell and Duckworth, ciate that.
is that raw materials prices have dropped “One thing that some clients are starting
dramatically since August. Concrete and as- to see,” he says, “is that it’s a good time to
phalt costs are down, tracking oil prices. De- buy construction services.”
mand for steel, copper and other materials is
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