Confidence in the Market Begins Slow Rise From Bottom
...being a stable market. “This is the first time our index has been above 100 in over two years,” says Schwartz, adding that the CONFINDEX has been rising since it hit a low of 79 in the fourth quarter of 2008.
However, the ENR and CFMA confidence surveys differ in their respective responses to the availability of credit and bonding. “Our rating rose from 97 to 101 [on a scale of 200] for bonding and credit availability,” says Schwartz. However, on ENR’s CICI survey, only 7.2% of respondents said credit for owner project financing is somewhat easier to obtain, and no respondent claimed credit is much easier to obtain. About 42.1% of those surveyed said credit availability is about the same, while 28.9% said that credit is much tougher to obtain and 21.8% said it is only somewhat tougher to secure credit for project financing.
Taking Its Toll
The recession has hurt many firms. The list of construction firms closing their doors or filing for Chapter 11 bankruptcy protection grows every week. Cubellis, one of Boston’s most prominent and largest architectural firms, which ranked on ENR’s list of the Top 500 design firms last year, closed its doors in December 2009.
Another prominent architectural firm facing a tough market is Looney Ricks Kiss, Memphis. The firm filed for reorganization under Chapter 11 on Feb. 23, but it is continuing operations throughout the process, according to press reports. The firm did not return phone calls seeking comment.
More recently, CMX, a Manalapan, N.J.-based engineer that ranked 97th on last year’s Top 500 list, filed notice under the New Jersey Worker Adjustment and Retraining Notification Act that it was closing. “CMX filed the notice on March 12 that it was permanently shutting its Manalapan office on May 11 and laying off 196 employees due to economic conditions,” says a spokesperson for the state Dept. of Labor and Workforce Development.
On March 19, Birdsall Services Group, a Sea Girt, N.J.-based engineering firm that ranked 169th on last year’s Top 500, said it had acquired “select assets” of CMX “to strengthen” the new parent’s existing land-development, survey, public works and water-resources services, says Birdsall CEO Howard Birdsall.
Contractors have not been spared. Tampa-based Kearney Development, one of the nation’s largest excavation and site-development contractors that ranked 205th on last year’s list of the Top 600 specialty contractors, filed for Chapter 11 last August.
Also, three of five operating units of Opus Corp., a Minnetonka, Minn., developer and design-build firm, have filed for bankruptcy protection in the last year: Atlanta-based Opus South, Phoenix-based Opus West and Washington, D.C.-based Opus East. However, two other Opus operating units, Minnetonka-based Opus Northwest and Rosemont, Ill.-based Opus North, continue to operate.
Industry veterans do not see any quick turnaround. However, most believe the market and the economy are in the process of righting themselves, and, for those who are patient and watch their cash flow, better times are coming.
