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Construction jobs decline
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| H&N photo Andrew Mariman Andy Johnson with Rocky Mountain Construction keeps the dust down as the company levels an area of land at the City Schools Maintenance and Transportation Department. |
Building permit applications drop for homes
By MEGAN DOYLE
H&N Staff Writer
There were nearly 200 fewer construction jobs in Klamath County last month compared to the same time last year, but contractors say they expect to be able to offer more jobs this fall.
Home construction was down this summer and the number of commercial projects slowed. Area contractors hope the fall brings more work, and they say calls are starting to come in, albeit several months later than normal.
And, builders say, developers are switching from residential to commercial construction. The number of building permit applications for homes dropped from 32 in July 2007 to 12 last month. The number of commercial building applications remained fairly steady.
There were 33 last month, two more than the same time period last year.
It seemed like people hung back this summer to see if the economy improved, said Annie Sedlacek, owner of Pacific Contractors in Klamath Falls.
“It’s been a slow start,” she said. “Now they’re starting to make plans.”
Last year’s boom
Last year was a boom year for the construction industry, said Tim Amuchastegui of Amuchastegui Building. The 30-year-old company was at about 170 percent above normal work, he said.
“This year, we’re going to probably have a year that’s a little below average,” he said.
But Billy Nash of Nash Construction says the strength of the last five years makes this year seem relatively low. Statistically, he said, it appears to be the worst downturn since the Great Depression, and homebuyer confidence is down.
“If they have the money, now is the best time to buy or build,” he said, noting many people have come in with cash for $500,000 projects.
Late start
Usually construction jobs are lined up with contractors and builders early in the year and construction begins in the spring.
But this year, local contractors say, more projects are being pushed to the fall and will be completed in the spring of 2009.
Amuchastegui said he is hearing about prospects for 2009 — most are commercial construction projects. But many of those projects take several months of planning and approvals before ground is broken, he said.
“It’s not unusual to have a one- or two-year lead time from someone wanting to build to having it being built,” Amuchastegui said.
Ray Smith of Ray Smith Contracting has been working on a remodel, but isn’t sure what will happen after his current job.
“I’m fairly busy, I have been,” he said, but he’s not sure what the fall will bring.
Impact: Layoffs
Several companies have considered laying off or have laid off workers.
“You can’t force somebody to buy something if they can’t use it,” said Pat Juhl, owner of J&P Wholesale.
He’s been streamlining the company’s budget, which created unfilled positions, and when people left the lumber wholesale company, he did not hire anyone to fill their positions.
Nash also has fewer employees this season. His company hadn’t done layoffs since a small and short lull more than five years ago.
Others are considering cutting personnel costs.
Smith does most projects by himself. He hires help for some larger jobs, but after his current remodel, he won’t need the help. While working on projects this summer, out-of-work construction workers asked him if he’s hiring. Unfortunately, he’s not.
Impact: Prices
Wood prices are down, but the cost of other materials continues to rise.
Juhl said he is selling wood at similar prices to what it sold for in the 1980s.
“About anybody in the wood business is down considerably,” he said.
Prices for such things as concrete and steel will continue to increase if people wait longer to build, said Amuchastegui.
Material prices increased 3 percent over last year, he said, and compared to other years, prices are up more than 10 percent.
In January, concrete prices were 10 percent higher, roofing was up about 15 percent and steel up 30 percent. Lumber and drywall material prices stayed flat, Amuchastegui said. Compared to two years ago, asphalt increased this year from about $1.50 per square foot to $3 per square foot.
Despite the price increases, subcontractors are trying to stay competitive so they can attract work, and interest rates for loans are lower than they were 10 years ago, builders say.
Impact: Diversification
To stay competitive, many contractors are diversifying what they offer. Amuchastegui is doing more design-build work, which gets his company involved earlier in the process. He tries to provide full service from beginning to end.
“That’s helped us stay a lot busier through the years than a lot of other people,” he said.
Pacific Contractors has stuck with residential construction, but owner Annie Sedlacek’s husband, Les, also has past experience with commercial and high-tech clean rooms, she said.
“He’s certainly considered doing commercial,” Sedlacek said.
They’ve put more emphasis on advertising this year than in the past, she said, but haven’t made commercial building a focus — yet.
Home construction was down this summer and the number of commercial projects slowed. Area contractors hope the fall brings more work, and they say calls are starting to come in, albeit several months later than normal.
And, builders say, developers are switching from residential to commercial construction. The number of building permit applications for homes dropped from 32 in July 2007 to 12 last month. The number of commercial building applications remained fairly steady.
There were 33 last month, two more than the same time period last year.
It seemed like people hung back this summer to see if the economy improved, said Annie Sedlacek, owner of Pacific Contractors in Klamath Falls.
“It’s been a slow start,” she said. “Now they’re starting to make plans.”
Last year’s boom
Last year was a boom year for the construction industry, said Tim Amuchastegui of Amuchastegui Building. The 30-year-old company was at about 170 percent above normal work, he said.
“This year, we’re going to probably have a year that’s a little below average,” he said.
But Billy Nash of Nash Construction says the strength of the last five years makes this year seem relatively low. Statistically, he said, it appears to be the worst downturn since the Great Depression, and homebuyer confidence is down.
“If they have the money, now is the best time to buy or build,” he said, noting many people have come in with cash for $500,000 projects.
Late start
Usually construction jobs are lined up with contractors and builders early in the year and construction begins in the spring.
But this year, local contractors say, more projects are being pushed to the fall and will be completed in the spring of 2009.
Amuchastegui said he is hearing about prospects for 2009 — most are commercial construction projects. But many of those projects take several months of planning and approvals before ground is broken, he said.
“It’s not unusual to have a one- or two-year lead time from someone wanting to build to having it being built,” Amuchastegui said.
Ray Smith of Ray Smith Contracting has been working on a remodel, but isn’t sure what will happen after his current job.
“I’m fairly busy, I have been,” he said, but he’s not sure what the fall will bring.
Impact: Layoffs
Several companies have considered laying off or have laid off workers.
“You can’t force somebody to buy something if they can’t use it,” said Pat Juhl, owner of J&P Wholesale.
He’s been streamlining the company’s budget, which created unfilled positions, and when people left the lumber wholesale company, he did not hire anyone to fill their positions.
Nash also has fewer employees this season. His company hadn’t done layoffs since a small and short lull more than five years ago.
Others are considering cutting personnel costs.
Smith does most projects by himself. He hires help for some larger jobs, but after his current remodel, he won’t need the help. While working on projects this summer, out-of-work construction workers asked him if he’s hiring. Unfortunately, he’s not.
Impact: Prices
Wood prices are down, but the cost of other materials continues to rise.
Juhl said he is selling wood at similar prices to what it sold for in the 1980s.
“About anybody in the wood business is down considerably,” he said.
Prices for such things as concrete and steel will continue to increase if people wait longer to build, said Amuchastegui.
Material prices increased 3 percent over last year, he said, and compared to other years, prices are up more than 10 percent.
In January, concrete prices were 10 percent higher, roofing was up about 15 percent and steel up 30 percent. Lumber and drywall material prices stayed flat, Amuchastegui said. Compared to two years ago, asphalt increased this year from about $1.50 per square foot to $3 per square foot.
Despite the price increases, subcontractors are trying to stay competitive so they can attract work, and interest rates for loans are lower than they were 10 years ago, builders say.
Impact: Diversification
To stay competitive, many contractors are diversifying what they offer. Amuchastegui is doing more design-build work, which gets his company involved earlier in the process. He tries to provide full service from beginning to end.
“That’s helped us stay a lot busier through the years than a lot of other people,” he said.
Pacific Contractors has stuck with residential construction, but owner Annie Sedlacek’s husband, Les, also has past experience with commercial and high-tech clean rooms, she said.
“He’s certainly considered doing commercial,” Sedlacek said.
They’ve put more emphasis on advertising this year than in the past, she said, but haven’t made commercial building a focus — yet.
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