Spring doesn't bring usual job volume

Kathy Baer, Springfield Contractors Association employment service director, said she's never seen a construction job scene like this.

Spring is prime time for construction hiring, but in the last month, only one SCA member has called her with job openings.

But people who want to fill construction jobs are waiting in the wings.

"I have more people looking for work than I have ever had," said Baer, who has worked with SCA since 1994. "I probably have 500 applications on file right now ... 500-plus in the last month."

Nationwide, commercial construction employment is taking it on the chin. Associated Builders and Contractors Inc. reported April 1 the nation has lost 90,700 jobs in the nonresidential construction since March 2008, shedding 49,800 jobs in the first three months of 2009.

Overall, construction employment in Missouri dropped by 2,500 jobs from February to March, and construction employment declined by 12,200 jobs, or 8.5 percent, between March 2008 and March 2009.

"It should be busy right now. It should be picking up," Baer said. "I should be having companies call me right now looking for help. Normally, this time of year is when everybody's getting ready, everybody's getting their crews lined up, everything's getting ready to pop. It's not popping this year."

Backlog blues

Commercial contractors typically have a backlog of work, so "it's a while from the time things start getting bad before you run out of work," said Kit Carson, president of Carson-Mitchell Inc.

And, Carson notes, the market will likely get worse before it improves.

"As far as commercial construction, fall will be worse by quite a little bit than it is now," he said, pointing to a shortage of projects in the planning phase.

"The architects and engineers, a lot of them don't have anything on the boards right now," he said. "By the time somebody gives them a job and they do the work on it and get it out for bids, that takes six to eight months."

Nationally, the economic downturn has so severely affected architects that the American Institute of Architects added 15 economic survival sessions to its recent national convention programming. Topics ranged from downsizing, firm valuation and stress management to business planning, strategic mergers and acquisitions, and firm closure.

Among commercial contractors, Carson anticipates continued layoffs as projects are completed and no new jobs take their place.

As it is, some companies are keeping their employees busy, but not necessarily at their regular tasks.

"You have superintendents with tool belts on. You've got people doing jobs they might not ordinarily be doing, but they are working," Baer said. "A lot of the companies have tried to keep as many people on as possible."

Fierce competition

Meanwhile, competition is red-hot.

"You're getting residential people bidding on commercial work, you're getting out-of-town people who are coming down because they don't have any work in their area right now," Baer said. "You've got bigger companies bidding smaller jobs than they normally would to keep their people busy."

Fewer projects and more competitors for that work is a boon for project owners.

"We are having pretty good success with our bids lately," said Doug Sampson, university architect and director of campus planning for Missouri State University. "Two things are happening. One is we're getting a lot more bidders on bid date, which is very nice from our perspective, and costs are being held in check, actually coming in below the estimates."

Most of MSU's current jobs are relatively small - many of them campus infrastructure projects - but the number of bidders is easily double the norm, Sampson said.

An emergency generator for the MSU power house attracted eight bidders; in the past, the university would be lucky to get three or four, he noted. Even more telling, the estimated cost of that project was $350,000 but the low bid was $158,960 - 55 percent below the estimate.

A parking lot maintenance job estimated to cost $71,000 was bid at $30,790, while building modifications at MSU's Professional Building, estimated at $250,000, were bid at $169,980.

"The two low bidders were within $17 of each other," Sampson said of the Professional Building job.

Chris Ball, president and principal architect for Jack Ball & Associates, reported a similar experience in school construction.

The Mountain View-Birch Tree Middle School, bid April 21, drew 16 general contractors, "almost double what we're used to," Ball said, and the low bid was substantially under budget.

"The estimate was for it to be approximately $6.8 million to $7 million," Ball said. "It came in just under $6 million."

School construction has slowed in the last two years, Ball said, "but the people who are proceeding with projects right now are getting an exceptional value for their money. Since those are taxpayer dollars, I think that's important to point out."

Sampson said he would love to bid some major projects in this climate, but MSU's next big venture, a $20 million-plus recreation center to be built west of Blair-Shannon Residence Hall, won't be bid until January 2010.

Looking ahead

While new construction is lagging, there is some demand for commercial renovations.

Ryan Mooney, vice president of business development for the Springfield Area Chamber of Commerce, said there are companies that have found their niche and are looking to grow. However, "most are looking at speed to market, so they're trying to get into existing buildings" rather than building new. That generates commercial construction work, but not much.

Carson, who's been in construction since 1969, said there are two indicators that he keeps an eye on for commercial work: architect workload and the housing market.

"This is totally unofficial, but generally, we lag the housing market by about two years. So when housing turns around, we're about two years from rocking and rolling, and that hasn't happened yet."

Fierce competition and punishingly low bids will result in a shakeout in the commercial construction community, Carson added, including some bankruptcies.

"I wish I had better answers and better news," he said. "And I'm hoping I'm wrong as all get-out."