Steadier Work in Northern Rockies
Commercial Construction Is Taking Up the Slack
By Robert Struckman, 2-15-08
Residential work may be slowing, but commercial construction seems to be taking up the slack for design, engineering and construction companies in the northern Mountain West.
It’s no secret that the construction industry nationally has been in a free fall, with home foreclosures at record levels and median prices dropping (or at least dipping). The collapse of major real estate markets has helped toss national and international financial markets into turmoil, though national trends can almost never be applied, exactly, to a local area or region.
So, in all this noise, what are the patterns that apply to this region? Here’s some news: A marketing director of a major design and engineering firm based in Montana but with offices around the region told me a few days ago that the firm had laid off the bulk of its employees in Arizona, which has been hit hard by the downturn.
A similar firm with a presence in oil-producing regions in Montana, Wyoming and Colorado has continued to do brisk business.
But one of the most interesting pieces of news came from Brent Campbell, CEO of WGM Group, one of Montana’s leading design and engineering firms.
About a year ago, Campbell said, just as residential construction started to slow, he noticed an increase in commercial construction projects, mostly things like bank branches and apartment buildings. He also said that while the firm has been taking on fewer new projects, it still has an 18-month-long backlog of work.
Since talking to WGM’s Campbell, I’ve heard similar comments from construction companies across the upper Mountain West and from a Federal Reserve Bank economist who watches Colorado and Wyoming.
That’s not to say the future looks entirely smooth. In some parts of the country, new buildings and subdivisions have been scrapped for lack of funding. Campbell has seen a few such instances, but not a landslide.
“A couple projects couldn’t get financing,” Campbell said. “We’re still busy, and will be for the foreseeable future.”
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Comments
It must be easier for someone sitting in the position of economist or engineer to have a more sanguine view of recent economic adjustments, than it is for the people that actually lose their jobs when the economy is is not "entirely smooth". Most people I know would be happy for 18 months of work period, let alone a backlog.
The problem is that we continue to prop up an unsustainable economic system, based on a boom and bust mentality, that disrupts communities and turns workers into vagabonds, like miners looking for the next big strike. Very little of the continuing commercial construction is building what this nation really needs; green energy production and sustainable design.
We need a sustainable system that treats labor with the same respect as capital, and promotes people working within their own communities, at a living wage, and not chasing over the planet for a position that pays enough to get by. Pointing out that the companies working with the oil industry continue to thrive, only illustrates the long term weakness of the regional economy, rather than providing any reassurance for the tough times ahead.