To Todd Harris, trouble at his local bank is a sign of thin times for his building contracting company, J.C. Harris & Sons, which is based in Elgin, Ill., not far from Chicago. Harris keeps an account at Amcore Bank, a mid-sized regional bank, and has even built its branch buildings. But like banks around the world, Amcore reported a loss for 2008: $97.5 million. William McManaman, Amcore’s CEO, told investors that in the last quarter of 2008, builders and developers accounted for the majority of the bank’s new bad loans. So for now, Amcore, like other banks, is about as likely to make new loans for non-owner-occupied building developments as Bernie Madoff is to receive birthday cards from his former clients.
Like other longtime, established building contractors, Harris has seen and survived other recessions. This one reminds him of 1980, with companies bidding in unfamiliar market segments. There is still school and health-care work, but other than that, “I think that the private marketplace has come to almost complete shutdown,” says Harris.