Rich Kramer is glad to be putting crew members back to work after business conditions led him to lay off about 20 percent of his staff in the spring. Here, RKC crews demolish a building to make room for construction of a highway maintenance facility.
Construction job scene stays tight
The latest unemployment data from a national trade association paint a grim picture for U.S. construction workers, and those same struggles are prevalent in the Ozarks.
A report issued in October by Associated Builders and Contractors Inc. shows 17.2 percent unemployment in the construction sector, up from 17 percent in August and 17.1 percent a year ago, meaning that while the construction employment outlook hasn’t gotten any worse, it hasn’t improved either.
Locally, the picture isn’t as clear, said Bill Dowling, director of the Missouri Career Center. The most recent data available from the Missouri Department of Economic Development show statewide construction unemployment of 17.4 percent, but a local figure isn’t available. Still, he said there’s evidence of ongoing struggles in construction employment.
“We’re not seeing any huge hiring in any means in construction. We’re not seeing any hiring,” Dowling said. “But again, we’ve not noticed any major layoffs.”
Kathy Baer, employment director at the Springfield Contractors Association, agreed with Dowling, noting that at her office, applications for construction jobs continue to pile up with very few job offers made.
“There are a lot of unemployed people out there,” Baer said. “I probably have more people looking than I have ever had since I’ve been here, and I’ve been here since 1994 – all levels, all trades, all skills, all ages. It just crosses the board.”
Baer said, too, that she gets mixed signals as to whether things are improving.
“I do see there are some small things out there. … Then also just as often as I hear some good news, I hear some people say it may be 2012 before it comes back. I don’t know what to think,” she added.
If there is any shift toward recovery in that sector, it’s subtle, said Geoffrey Butler, CEO and president of the architecture firm Butler, Rosenbury & Partners Inc.
Butler said generally, if jobs for architects pick up, construction jobs will follow. His perception is that banks – often blamed for the construction slowdown – are more interested in lending now.
“A client said he actually got a couple of calls from banks that said they are interested in lending some of that money,” Butler said. “The banks are learning that if they don’t lend it, they can’t make money for their shareholders.”
Dowling said the reasons why construction remains slow depend on who’s being asked.
“Project people blame it on the tightness of the money supply,” he said. “I’ve heard bankers say, ‘We’re not getting any proposals – we’re not getting anyone who wants to do anything.’”
Still, Butler acknowledges that full recovery may take a while.
“We still have a consumer confidence deal. It’s a slow pull. We are seeing more interest than we were six months ago,” Butler said, noting that even so, things are by no means rosy.
His architecture firm, for example, shrank to 26 employees from 88 in 2008, and competition for jobs remains fierce, with 20 or 30 firms bidding on the same job.
“It’s very, very competitive, but that’s what we’re calling the new normal,” Butler said. “That’s just the reality of the economy. In our industry, no one expects that it’s going to come back quickly.”
Morris Dock, president of general contractor MoDoCo Inc., faces the same bidding competition in construction, which has him bidding very few jobs for his company’s nine employees.
“I see a lot of bid lists that have 15 to 20 bidders. Why would I want to be low on that group?” Dock said, adding that at that level of competition whomever wins the bid isn’t likely to make much money on the project.
Rich Kramer, president of Rich Kramer Construction, said he was able to keep his full crew busy until May, when he had to lay off 20 percent of his employees.
The company reports a current staff of 35 for Springfield Business Journal’s 2010 list of commercial general contractors.
Kramer said conditions are looking up, and about half of the laid-off employees have returned to work.
“I’m optimistic that work is picking up, compared to what it was midsummer. Midsummer it was horrible. It got real slow in summer, which is usually the busiest time for construction,” he said, adding that he hopes to hire back the remaining laid-off employees by December.
Kramer and his industry cohorts agree that if there is any improvement in construction, it’s in highway work or other public projects. Kramer points to a project he has under way to build a new maintenance facility for the Greene County Highway Department.
“It’s a tough, tough deal for everybody, and I don’t see that it’s going to come back quickly,” Butler said. “But there are signs that things are improving, very slowly and very gradually.”[[In-content Ad]]