Recovery in construction sector likely years away
As large commercial construction projects wind down in the Grand Valley, people working on the front lines nervously join real estate agents, bankers and mortgage brokers in hoping that more large projects come on line beyond the middle of next year.
Employment remains a concern across all industries, but the construction sector has been hit especially hard. Labor officials estimate that about one in five construction workers is unemployed — both at the national level and in Mesa County. With such projects as the American Furniture Warehouse and the city public safety complex scheduled for completion within the next year, people in the construction industry anxiously look for any signs of long-term employment. Some signs are popping up.
“We are, on a reasonably regular basis, getting requests,” said Dan Roberts, chief operating officer for Mays Concrete in Grand Junction.
But success in pursing requests for construction proposals can depend on a company’s willingness to send workers outside of Colorado. Some employees are working in Montana for a national parks service project, Roberts said.
The company has also pursued projects in Wyoming and Mexico. “We’re always looking in Utah,” Roberts said.
Business in 2011 is slightly better than it was last year, he said. Mays employs about 100 people and hasn’t been forced to lay off people this year. There’s even a small backlog of work to tackle.
But Roberts doesn’t foresee significant commercial construction occurring anytime soon. “It would be late next year at the earliest,” he said. “The next two years will be tough.”
The prediction parallels a forecast from Associated Builders and Contractors, a national trade organization. A report issued in June suggests the commercial construction recovery is more than a year away.
“From what we’ve seen so far in 2011, nonresidential construction will likely be further delayed,” said Anirban Basu, chief economist for ABC. “Right now, what will happen in 2012 remains unclear.”
Although construction employment reportedly grew during the four months preceding June, Basu didn’t predict significant growth for the remainder of the year. A continued soft economy has also softened predictions for job growth.
“No sector of the economy has been hit harder than the construction industry,” he said.
One bright spot is the potential for a couple of lucrative Western Colorado industries to grow over the next year or so.
“Segments of the construction industry that will likely experience growth in the coming 10 to 12 months will be health care, which is the construction of hospitals, health centers and clinics, and the natural resources sector, which is in reaction to the growing cost of energy,” Basu said.
The recent construction of a 12-story patient tower at St. Mary’s Hospital in Grand Junction was a boon to construction workers and the health care sector alike. Eight floors opened last year and the other four floors are expected to fill as demand for services increases. Meanwhile, Community Hospital plans to construct a new hospital and health care complex near G and 23 1/2 roads by 2016.
Any increase in natural gas extraction also boosts the local construction industry. Workers are needed to build roads and structures that energy companies require. Workers also find jobs on drilling rigs and with other operations in the Piceance Basin
Of course, growing construction and energy sectors can lead to the sale of more homes, higher tax collections and stronger profits for local stores and restaurants.