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Southeast Specialty Contractors Still Seeking Market Stability

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Across the Southeast, specialty contractors are finding out that this construction recovery isn't arriving via a wave or even a slow upward curve. Instead, this post-recession rebound is coming together on a piece-by-piece basis, like a massive puzzle that's only now starting to reveal its overall picture.

Photo courtesy Gate Precast
Concrete Progress Gate Precast is providing a unique set of precast concrete panels to the Miami Science Museum project, which is being led by Skanska USA.
Photo courtesy of NASA
Up and Away? At Kennedy Space Center, Florida, NASA is renovating its Vehicle Assembly Building to accommodate the next generation of 'heavy-lift' rockets. Specialty firm KHS and S Contractors is performing interior framing and drywall work for general contractor Hensel Phelps Construction.
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Different parts of the Southeast construction industry are seeing the pieces of recovery come together at a different rate. South Florida, with its multifamily boom still continuing, for instance, appears to be ahead of other areas, such as Atlanta, where the picture remains less clear.

"We have seen some stabilization, but there's a question about where that next job is coming from when [specialty contractors] look a few months down the line," says Vernon Thomas, director of the Georgia chapter of the American Subcontractors Association, Stockbridge, Ga.

Even across Atlanta, it remains hit or miss, with some specialty firms starting to experience strong business growth while others continue to struggle.

"We're not seeing specialty contractors experiencing the same situation across the board," he says. "I just don't see a consistency."

One factor that's possibly impacting the area's specialty contractors is the work force situation. During the downturn, the Atlanta metro's commercial construction market came to a standstill. And in 2011, the state of Georgia expanded the mandated use of the E-Verify system to include all businesses with more than 10 employees—a change that will definitely impact contractors. With a construction comeback on the horizon, some Atlanta construction industry officials are worried that workers won't return to the area when activity picks up.

The new worker-documentation law is "not going to help," Thomas says. "If the economy turned up quickly, I don't know where the labor force would come from. It's a problem, and it's hard to overcome."

An uptick is on its way, highlighted by an estimated $2 billion worth of construction ramping up around the football and baseball stadium projects for the Atlanta Falcons and the Braves.

Some are worried that as activity heats up, specialty firms in particular may struggle to staff their projects. At a Society for Marketing Professional Services event earlier this year in Atlanta, for instance, Russ Brockelbank with DPR/Hardin noted that the general contractor was already finding that some subcontractors simply didn't have sufficient staff to bid some jobs.

Some suspect that workers have flocked instead to South Florida, which was one of the first Southeast regions to recover. They may be right.

"Staffing our projects is not an issue," says Denise Santiago, vice president of business development with Boynton Beach, Fla.-based concrete firm Builders Plus.

Moreover, labor remains mostly available even though, as Santiago adds, "There is no lack of construction work in South Florida." The residential market remains hot, she says, with activity picking up in the industrial and commercial sectors.

One thing hasn't changed from the downturn, however, Santiago adds: "General contractors are getting quality specialty contractors at bargain prices."

Other Factors?

Whenever the market recovers, contractors are finding out that there's a new dynamic. One specialty firm that's taken note of the changing landscape is Tri-City Electrical Contractors, profiled this month as the Southeast Specialty Contractor of the Year.

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